After a remarkable surge in early November, Dogecoin [DOGE] is currently stabilizing around the $0.40 threshold. Recent data indicates a notable increase in on-chain activities, with previously inactive tokens re-emerging and transaction volumes on the rise.
Despite the apparent uncertainty surrounding DOGE, the connection between spikes in age-consuming tokens and price fluctuations emphasizes the importance of closely monitoring key levels of support and resistance.
Resurgence of Dormant Dogecoin Tokens
An intriguing observation lies in the surge of Dogecoin’s Age Consumed indicator, which traces movements of long-dormant tokens that have recently become active. According to Santiment’s chart, significant spikes were recorded in late October, mid-November, and December.
An analysis revealed a peak of 1 trillion on the 16th of December, the highest level recorded since October when it surpassed the 1 trillion mark.
These spikes often coincide with crucial price shifts, indicating potential profit-taking or strategic maneuvers by major investors. The movement of inactive coins typically signifies long-time holders re-entering the market or building up selling pressure.
The largest spike aligns with the initial price surge, underscoring the link between on-chain activities and the upward trajectory of DOGE.
Growing Transaction Volumes Indicate Increased Market Engagement
The Transaction Volume data further supports this trend. Transaction volumes began to sharply rise towards the end of October, reaching a peak in mid-November, corresponding with Dogecoin’s bullish price movement.
An analysis indicated a minor upsurge on the 16th of December, surpassing 5.5 billion.
This surge in activity indicates heightened market interest and liquidity flowing into DOGE. However, transaction volume tapered off slightly in December, in line with DOGE’s consolidation around $0.40.
This stabilization implies a neutral market sentiment, with traders awaiting a significant breakout.
DOGE Price Maintains Support with a Neutral RSI
Looking at the price and RSI chart, Dogecoin has consolidated above its 50-day Moving Average (MA) at $0.34, indicating steady bullish support. Meanwhile, the Relative Strength Index (RSI) stands at 51.32, signaling a neutral momentum, suggesting that DOGE is neither in an overbought nor oversold state.
If DOGE manages to uphold this crucial support level and transaction volumes increase once more, a potential push towards $0.45 could be on the horizon. Conversely, a drop below the 50-day MA would indicate waning bullish momentum and might trigger a retracement towards the $0.30 zone.
The current on-chain activities and price movements of Dogecoin indicate a pivotal consolidation phase. While spikes in Age Consumed and transaction volumes suggest notable whale activities, the current neutral RSI of DOGE signifies a balanced market sentiment.
Traders are advised to closely observe on-chain signals and price actions to anticipate DOGE’s next moves.