Dogecoin: Can high network activity help DOGE’s uptrend

• Social sentiment around Dogecoin has turned bullish in the last few days.
• DOGE was down by 1.7%, and most market indicators remained bearish.

Dogecoin [DOGE], the world’s largest meme coin, did not show much volatility in its price over the past few days. However, its network activity was booming, which could have a positive impact on the coin’s price if the trend continues.

Let’s have a closer look at DOGE’s state to understand whether investors should expect gains from DOGE in the near term.

Dogecoin’s network is growing fast

Ali, a popular crypto analyst, posted a tweet on 30th January highlighting one of Dogecoin’s latest achievements.

As per the tweet, the meme coin witnessed a massive hike in its network growth. This was evident from the fact that DOGE’s number of new addresses increased by 1,100% over the past week.

The #Dogecoin network is witnessing a remarkable surge in growth, with new addresses increasing by a staggering 1,100% over the past week!

On January 29 alone, a record-breaking 247,240 new #DOGE addresses were created, marking an all-time high. A sustained uptrend in network… pic.twitter.com/7tNAPzJaP2

— Ali (@ali_charts) January 30, 2024

To be precise, a record 247,240 new DOGE addresses were created on the 29th of January 2024, marking an all-time high. Such a hike in network activity is generally considered to be a bullish signal, hinting at a possible price hike.

Not only did the meme coin’s network activity skyrocket, but it also witnessed a new integration. AMBCrypto reported earlier that the OKX Web3 marketplace has integrated Dogecoin’s inscription token standard, DRC-20 tokens.

Should investors expect a Dogecoin bull rally?

Though the aforementioned developments looked optimistic for DOGE, things were yet to reflect in reality.

According to CoinMarketCap, DOGE was down by more than 1.7% in the last 24 hours. At the time of writing, it was trading at $0.08012 with a market capitalization of over $11.4 billion.

The price drop took a toll on Dogecoin’s social metrics, as its social volume plummeted over the last few days.

Nonetheless, despite the negative price action, sentiment around DOGE turned bullish, as evident from the rise in its weighted sentiment on the 30th of January 2024.

Source: Santiment

Considering the high network activity, if DOGE manages to actually begin a rally, it must go above a critical resistance zone.

AMBCrypto’s analysis of DOGE’s liquidation heatmap revealed that when DOGE’s price touched $0.083 earlier, it witnessed massive liquidation. Therefore, it might act as a strong resistance level, which the meme coin must breakout from in order to maintain a bull rally.

Source: Hyblock Capital

To better understand the viability of a DOGE bull rally in the short term, AMBCrypto took a look at its daily chart.

Realistic or not, here’s DOGE’s market cap in BTC terms  

Both Dogecoin’s Money Flow Index (MFI) and Relative Strength Index (RSI) went sideways near their respective neutral marks. This clearly suggests that investors might witness a few slow-moving days.

Its Bollinger Bands also revealed that DOGE’s price was in a less volatile zone, indicating that the chances of an unprecedented price surge were slim in the near term.

Source: TradingView