Dormant Dogecoins (DOGE) Awaken Following 19% Dip from Price Peak

by

As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen my fair share of bull and bear runs, bubbles, and market consolidations. The recent movement of dormant Dogecoins is a trend that caught my attention, reminiscent of the pre-bull run periods in 2017 and 2021.

Lately, there’s been an uptick in activity surrounding Dogecoin (DOGE), with coins that hadn’t moved for a while now being transferred. This shift in ownership has occurred after a drop of approximately 19% in the coin’s value since it reached a three-year peak of $0.48 on December 6.

As an analyst, I’ve observed a noteworthy trend: The movement in the coin market suggests a bullish sign. This stir is due to the resurfacing of hibernating Dogecoins, which has amplified network activity. This increased activity sets the stage for a potential rebound in DOGE.

Dormant Dogecoins Change Hands

The on-chain metric in focus here is Dogecoin’s Mean Dollar Invested Age (MDIA), which has trended downward over the past few weeks. This metric measures the average age of all coins in a network weighted by their purchase price, reflecting how long they have remained in wallets. 

As an analyst, I observe that when Median Age of Supply (MDIA) increases, it suggests that coins are being held for longer periods in wallets, indicating reduced network activity and potentially pointing towards market consolidation. Conversely, a decreasing MDIA implies heightened network activity as previously dormant coins re-enter circulation, which can often signal bullish momentum.

As a researcher, I’ve observed an intriguing trend in Dogecoin (DOGE) based on data from Santiment. Specifically, the Mean Dollar Invested Age (MDIA), which measures the average age of coins in circulation, has decreased to approximately 370 days over the past eight weeks. This suggests that a significant portion (around 31%) of the long-held DOGE coins have been exchanged or sold, leading to a younger profile of holders as the coins continue to circulate.

When MDIA trends downward in this manner, dormant coins, often held by major stakeholders or long-term investors, come back into play, leading to increased network activity, which positively impacts price. 

According to the on-chain data provider’s recent statement, one crucial sign that a bull market may persist is the age of the coins. In the past, bull markets in 2017 and 2021 didn’t end until the average age of the assets began increasing once more. This means that the coins were being held for longer periods, which can suggest that the bull market could carry on.

The favorable funding rate for DOGE on various crypto platforms supports a bullish perspective, with the meme coin’s current funding rate standing at 0.003%.

In simpler terms, the funding rate is a regular payment made among traders in continuous future contracts to ensure the contract’s price reflects the real value of the underlying asset. When the funding rate is positive, long traders (those who believe prices will rise) are giving money to short traders (those betting on price decreases). This implies a bullish market outlook and could lead to increased pressure for prices to go up.

DOGE Price Prediction: 3-Year High Back Within Reach

On a daily graph, DOGE’s trades surpass its Super Trend line, which provides a flexible support at approximately $0.34. This tool gauges the general direction and intensity of price movements. It appears as a line on the chart, altering color based on the current trend: green implies an upward trend, whereas red symbolizes a downward trend.

If this bullish trend persists, DOGE may witness a rebound toward its three-year high of $0.48.

On the flip side, the price of DOGE might decrease and approach the support level suggested by its Super Trend indicator, which is around $0.34. If the bulls fail to keep this level as a base, the price could potentially fall even lower to $0.31.

Read More

2024-12-11 13:15