Reasons behind Dogecoin’s stalling prices
- Daily active addresses trading DOGE rallied in the month last.
- Its price has, however, failed to react.
Dogecoin [DOGE] saw increased network activity in the last month. However, this did not translate into a higher price action for the meme coin. According to on-chain data provider IntotheBlock, the count of daily active addresses that sold and bought DOGE exceeded 45,000 in the last month.
Despite complex markets, active addresses for most top blockchains have remained stable. Some assets, like $LTC and $DOGE, even showed significant spikes in activity recently.#Bitcoin #Ethereum #Dogecoin #Litecoin pic.twitter.com/PI1KxcoT5k
— IntoTheBlock (@intotheblock) August 19, 2023
Read Dogecoin’s [DOGE] Price Prediction 2023-24
Typically, a surge in an asset’s network activity often acts as a precursor to a price rally, indicating increased interest in that asset. However, DOGE’s failure to log a price growth despite the jump in daily active address count might be due to its statistically positive correlation with leading coin Bitcoin [BTC].
Amid severe price volatility in the past few days, BTC’s price fell by 12% in the last month. Likewise, the alt’s value almost declined by almost 10% during the same period. At press time, DOGE exchanged hands at $0.06406, data from CoinMarketCap showed.
Do not put it all on Bitcoin
In addition to its price being held back due to its correlation to BTC, the decline in DOGE’s price in the last month was also attributable to the drop in the count of transactions completed by addresses holding the meme coin.
According to IntoTheBlock, the daily count of DOGE transactions declined since 30 July. As of 19 August, 79,150 transactions involving the meme coin were completed. This represented an 89% decline from the 739,830 transactions recorded on the last day of July.
While the last month was marked by a general decline in DOGE transactions, the steep decline in whale transactions during that period stood out.
The volume of Dogecoin transactions valued between $100,000 and $1 million decreased by 21% in the last month, and the volume of transactions valued between $1 million and $10 million fell by 46%.
For DOGE transactions above $10 million, this completely decimated and fell by 100%, data from IntoTheBlock revealed.
How much are 1, 10, or 100 DOGE worth today?
More troubles lie ahead
A closer look at DOGE on the futures market revealed that its price might be at risk of a further decline. According to Santiment, the alt’s Open Interest has trended downward since 14 August, falling by almost 50% in the past five days.
Moreso, funding rates across leading exchanges dYdX and Binance have been significantly negative within the same period. This suggested that traders continued to open positions that bet against an increase in DOGE’s price. This might put downward pressure on the alt’s price should general sentiment remain the same.