Dogecoin: Assessing if the weekend’s hype had any impact
- DOGE’s social activity rallied over the weekend’s trading session
- Its price, however, failed to react accordingly
One of the market’s leading memecoins, Dogecoin [DOGE] registered high social activity over the weekend. Even so, its price failed to record any significant rally on the charts.
In fact, according to data from LunarCrush, DOGE’s social activity hiked by over 73% on 12 August, with total social engagements of 65 million.
?Keeping an eye on $DOGE.
Social engagements are coming in at 64.66 million (+73.43%) today. What does that mean? It means the community is really active in $DOGE social posts.https://t.co/cfvWAEpPWu pic.twitter.com/Mewyl2nZ8B
— LunarCrush (@LunarCrush) August 12, 2023
The surge in an asset’s social activity often indicates increased interest in that asset. Depending on market sentiment, it determines the next direction of that asset’s price.
Read Dogecoin’s [DOGE] Price Prediction 2023-24
With a mere 2% jump in price during the weekend’s trading session, the market’s negative sentiment put pressure on DOGE’s price.
DOGE’s troubles did not start today
Although its price has rallied by 18% over the past month, DOGE’s on-chain data revealed a gradual decline in network activity. According to data from IntoTheBlock, the count of transactions involving DOGE has fallen steeply since 27 July.
With 229,290 DOGE transactions completed on 12 August, figures for the same have dropped by 56% since the month began.
As the daily transaction count dwindles, the number of transactions that qualify as whale transactions has also decreased. In fact, IntoTheBlock found that the number of daily DOGE transactions worth between $1 million and $10 million has dropped by 66% over the past month alone.
While its price has appreciated in the last month, DOGE holders are yet to be incentivized to trade more because the coin remains undervalued, as shown by its Market Value to Realized Value (MVRV) ratio.
A high and positive MVRV ratio indicates that the market is overvalued, as investors pay more for coins than they are worth. Conversely, when it is low and negative, the market is undervalued, as investors pay less for coins than they are worth.
DOGE’s MVRV slipped into the negative territory on 20 April and has since remained below the zero line, data from Santiment revealed. With a reading of -10.21% at press time, if all DOGE holders sold their coins at its current price, most traders would realize losses.
Realistic or not, here’s DOGE’s market cap in BTC’s terms
In DOGE we trust
While the memecoin remains a significantly unprofitable venture for most holders, Open Interest continues to climb. In fact, it has trended upwards over the last two months.
According to Coinglass, DOGE’s Open Interest has hiked by 99% since 12 June.
Finally, a look at funding rates across exchanges showed that most trade positions occupied since then have been long positions.
This was a sign that more traders had placed bets in favor of a hike in DOGE’s value. This is a bullish signal, which may help the memecoin’s price rally.