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Dogecoin On-Chain Activity Decreases — Will The Price Follow?

Last Updated February 12, 2024 4:19 PM
Nikola Lazic
Last Updated February 12, 2024 4:19 PM

Key Takeaways

  • Dogecoin has fallen out of the top 10 cryptos and is testing its $0.075 support level.
  • There has been a drop in DOGE transaction volume and whale activity.
  • A lack of innovation could further dampen DOGE’s appeal.

Dogecoin (DOGE) is experiencing a downturn, with a decline in several key metrics over the past week. This price drop of nearly 14% saw Dogecoin fall out of the top 10 cryptocurrencies by market cap, a position it had maintained for over a year. 

However, it is currently setting its key horizontal support above $0.075. Considering it shows signs of weakness, will DOGE break continue declining, or will it make a comeback? 

Dogecoin Fundamentals 

This decline in ranking is accompanied by a decrease  in total transaction volume and whale activity, indicating a slowdown in the coin’s adoption rate. The coin that has proven popular with whales losing their support could be a sign of concern. 

Analysts point to a lack of innovation and fresh growth initiatives within the Dogecoin protocol as primary reasons for its lacklustre performance. The market’s appetite for speculation without substantive development support is waning. This suggests that investor interest could keep falling unless Dogecoin makes significant changes. 

Currently, the Dogecoin community is looking forward to the Doge-1 space mission. That is, however, unlikely to have a lasting impact on the coin’s fundamentals. Without meaningful updates from Dogecoin developers, the coin risks other memecoins, with more activity and development, overtaking it.

DOGE Price Analysis 

The price of DOGE made a breakout above its long-lasting descending trendline, showing promising signs of a starting bull phase. However, the rise was stopped at the resistance of $0.10 on December 11 last year. 

Daily chart.
DOGE at $0.075 support.

A downturn happened, with the price reverting to $0.076, a significant support level. This could be the first uptrend and the first correction in the bull phase. However, it needs to prove that it has the strength to stay higher than before. 

If DOGE bounces from its current levels, we could see a more significant increase and, potentially, a high of $0.15. But if it continues its downward trend and goes below $0.075, that would indicate more downside to be expected. 

In the second case, we could see DOGE revisiting its furthest support at $0.058, the starting point of the last uptrend. The daily chart RSI, which sits at 47%, suggests there could be further to fall. 

What happens now at $0.075 will determine the future outlook, so we will closely monitor what happens next. 

 

Disclaimers

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

 

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