Popular memecoin Dogecoin (DOGE) has been trading sideways, above the 200-day exponential moving average (EMA) since Jan. 7. DOGE price is down 0.4% over the last week and 14% over the last month and even though the technical setup hints at further losses for DOGE, the recent spike in network activity is interesting.
Dogecoin network activity surges
Dogecoin is experiencing a significant increase in its network activity. Data from market intelligence firm IntoTheBlock shows over 890,000 new Dogecoin addresses have been created over the past week.
This increase in new addresses coincides with an 86% adoption rate as the new users execute their first transactions on the blockchain.
Additional data from Santiment shows a spike in daily active addresses (DAA), which increased from 124,240 on Jan. 23 to more than 498,000 on Feb. 2.
This resurgence in network activity could be due to the release of the iconic DOOM video game on the Dogecoin blockchain and the upcoming DOGE-1 launch.
DOOM meets Dogecoin! Developer #minidogeart deploys the iconic 1993 DOOM game on the Dogecoin blockchain using Ordinals technology. Now, gaming data is fetched entirely from Dogecoin network, showcasing the potential of blockchain for preserving digital assets.
— BlockVoyager (@BlockVoyagerAIO) January 24, 2024
A third factor is the increasing use of Dogechain, a layer 2 blockchain built on the Dogecoin network.
— DogeChainNews (@DogeChainNews1) February 2, 2024
These factors have helped generate interest in the Dogecoin network and if this trajectory remains, DOGE price could react if investors begin to take positions in the token.
However, the technical setup suggests that the price is poised for a deeper correction from the current levels.
DOGE’s descending triangle could attract more bears
Since Dec. 6, 2023, DOGE price action has been characterized by a series of lower highs and relatively equal lows around $0.078, and a descending triangle has appeared on the daily chart.
This bearish technical formation is confirmed once the price produces a decisive close below the support line – formed by the equal lows. This projects a drop in price equal to the height of the triangle
Despite this pessimistic outlook, the relative strength index (RSI) is in the neutral zone at 45, a hint at traders’ current indecisiveness.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.