Recent Network Activity Sparks Interest in Dogecoin (DOGE) Despite Bearish Signals
Despite technical analysis pointing towards potential further losses for DOGE, recent developments in network activity have piqued the interest of cryptocurrency enthusiasts.
The famous meme coin, Dogecoin (DOGE), has been trading sideways above the 200-day Exponential Moving Average (EMA) since January 7. Data from market information company IntoTheBlock reveals that over 890,000 Dogecoin were created in the past week, coinciding with an adoption rate of 86%. New users executed their initial transactions on the Dogecoin network.
Moreover, Santiment data indicates a significant increase in Daily Active Addresses (DAA), rising from 124,240 on January 23 to over 498,000 on February 2.
Several factors have contributed to the resurgence of Dogecoin network activity. The integration of the popular video game DOOM on the Dogecoin blockchain has attracted gamers and blockchain tech enthusiasts, leading to increased interaction with the network. Additionally, anticipation surrounding the upcoming DOGE-1 event has generated significant buzz among cryptocurrency enthusiasts.
Another factor boosting network activity is the growing use of Dogechain, a layer-two blockchain built on the Dogecoin network. This development has expanded Dogecoin’s utility for both developers and users.
However, despite the increased network activity, a deeper price correction may be on the horizon. Since December 6, 2023, DOGE price movements have featured a series of relatively lower highs and equal lows, primarily around the $0.078 mark. A descending triangle pattern has emerged on the daily chart, indicating a bearish formation.
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Confirmation of this bearish setup would occur if the price achieves a decisive close below the support line formed by the equal lows. In such a scenario, this pattern could signal a price decline approximately equal to the height of the triangle. Despite these bearish signals, the Relative Strength Index (RSI) currently stands at 45, indicating trader indecision.
The increase in Dogecoin network activity is undeniably an encouraging sign, reflecting growing interest and engagement with the cryptocurrency. Events such as the DOOM game launch on the Dogecoin blockchain, the upcoming DOGE-1 release, and the increasing adoption of Dogechain all contribute to this newfound enthusiasm.
However, whether this surge in network activity will translate into a significant rise in DOGE prices remains to be seen. The bearish technical pattern on the price chart suggests caution for investors. A decisive close below the support line could trigger a more substantial price correction.
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