Dogecoin’s Community Expands Rapidly with Over 400,000 New Wallets in Just Two Weeks

06.02.2024 / Payment system news

Dogecoin (DOGE) has remained relatively static in terms of price action, with its value hovering around the $0.07 support area over the past month. This comes after a 26% price drop since the 11th of December, 2023, which left Dogecoin’s price trading mostly sideways.

Despite this apparent stagnation in price, in the background, the Dogecoin network has been bustling with activity, suggesting potential bullish momentum in the making.

On Tuesday, renowned crypto analysis firm Santiment highlighted a notable surge in Dogecoin wallets despite the lacklustre price action. As per the firm, a staggering 413,800 new wallets, primarily holding between 0.001 and 1 DOGE, have been added to the network since January 22.

Furthermore, according to data from the on-chain Analysis platform, “IntoTheBlock”, there has been a significant uptick in Dogecoin’s transactions over recent weeks, with the average weekly transaction size reaching approximately $592.84. This surge in network activity indicates a growing interest in Dogecoin despite its recent price struggles.

Dogecoin’s network activity resurgence can be attributed to several pivotal factors. The recent introduction of ‘Doginals’ inscriptions on the Dogecoin network and the emergence of DRC-20 tokens have played a significant role. Notably, DRC-20m, Dogecoin’s proprietary token standard, facilitates the issuance of fungible tokens within its network, contributing to its renewed vitality.

Recently, crypto exchange OKX announced its support for Doginals, swiftly followed by a surge in new addresses conducting their first DOGE transactions.

Moreover, this continued enthusiasm for the meme-inspired cryptocurrency is bolstered by speculation regarding its potential integration into the payments sector of X (formerly Twitter), enhancing its attractiveness to investors.

Despite the promising signs of network growth and activity, technical analysis offers mixed signals. While some experts foresee a potential downside for Dogecoin’s price in the near term, citing lower highs and lower lows since early December, others maintain a bullish outlook. Notably, popular crypto analyst Ali Martinez recently highlighted the tightening of Bollinger Bands on Dogecoin’s four-hour chart, signalling an imminent spike in price volatility.

That said, should DOGE breach the support range around $0.077-$0.078 it could face a further decline, potentially attracting more bearish sentiment into the market. Conversely, a strong breakout out of the current price squeeze could propel the price towards the $0.1 level with ease.

DOGEUSDT Chart via TradingView