The recent data from IntoTheBlock sheds light on a notable divergence in Dogecoin’s network activity and its price movement. While the cryptocurrency has been experiencing a sharp rise in price, its network activity has seen a significant decline. This analysis utilizes blockchain data and insights provided by IntoTheBlock to assess whether this trend indicates a bullish or bearish market sentiment.
Dogecoin’s Price Outlook: Bullish Trends and Potential Challenges
The current daily chart for Dogecoin (DOGE) reflects a strong bullish trend, with the cryptocurrency surpassing the golden ratio resistance near $0.082 and reaching a new high. This suggests the conclusion of a previous corrective phase. The next significant Fibonacci resistance level is identified around $0.093, and if breached, there is potential for a 30% increase, targeting the golden ratio level at approximately $0.12.
Supporting the bullish outlook, indicators such as the Moving Average Convergence Divergence (MACD) histogram and MACD lines show a bullish trend. Additionally, the Exponential Moving Averages (EMAs) exhibit a golden crossover, reinforcing the positive momentum. However, a bearish divergence in the Relative Strength Index (RSI) raises the possibility of a corrective price movement.
In the event of a correction, key Fibonacci support levels are anticipated at around $0.078 and $0.07.
Dogecoin Holder Distribution: Profitability and Break-Even Scenarios
Approximately 65% of Dogecoin (DOGE) wallet addresses are currently in a profitable position, while around 29% are experiencing a loss. Additionally, nearly 6.7% of DOGE holders are in a break-even situation, where selling at the current market price results in neither profit nor loss.
This distribution reflects recent market performance and price fluctuations, providing insights into the sentiments and positions of DOGE holders.
Network Growth and Activity: Expanding User Base
The Dogecoin network has exhibited signs of growth, with an increase in the average count of addresses holding DOGE balances over the past 30 days. This uptick, reaching around 5.13 million addresses at its peak, suggests a growing user base and rising interest in Dogecoin.
Network Activity Decline: A Concerning Trend
However, there has been a significant decline in Dogecoin’s network activity over the past week. The number of active DOGE addresses has decreased by more than 51%, indicating a notable reduction in transactions or movements involving Dogecoin. Additionally, there is a roughly 67% decrease in new DOGE addresses created, suggesting a slowdown in new participants or investors entering the market.
A decline of approximately 16% is observed in the number of addresses without any DOGE balances, potentially indicating a shift in dormant or inactive addresses.
Telegram Sentiment and Community Engagement: Mixed Signals
The sentiment surrounding Dogecoin on Telegram appears to be predominantly positive, with nearly 259 positive news pieces compared to around 107 negative news stories. This positive narrative aligns with favorable perceptions within the Telegram community.
However, the Dogecoin Telegram group has experienced a decline in membership since the end of 2021. Despite positive news coverage, the decrease in group members may indicate waning interest or shifts in community engagement.
Ownership Distribution: Whales and Retail Investors
Dogecoin’s ownership distribution reveals concentration among large investors and whales. Approximately 22% of the total DOGE supply is held by 81 large investors, each possessing between 0.1% and 1% of the tokens. Nine whale addresses collectively own nearly 43% of the supply, each holding at least 1%.
The remaining 35.22% of Dogecoin is held by small investors, representing the broader base of individual or smaller-scale holders.
In conclusion, Dogecoin faces a complex scenario with bullish price trends but concerns about declining network activity and community engagement. Traders and investors are advised to monitor these dynamics closely for a comprehensive understanding of market conditions.