The futures market for Dogecoin (DOGE) has witnessed a significant drop in trading volume over recent months, with numbers falling from a peak of $58.2 billion in November to a more modest $992 million. This decline indicates a noteworthy decrease in market speculation.
From mid-November onwards, trading volume surged significantly, aligning with a price of $0.308, signaling a period of heightened trading activity. However, in the subsequent weeks, there was a gradual but consistent decline in volumes, suggesting a waning interest from investors and a loss of momentum.
As December approached and transitioned into the new year, daily futures volumes consistently remained below $5 billion, solidifying the drop from previous peak levels.
This downward trend in futures volume could suggest a lowering of confidence or speculative interest in DOGE, potentially influenced by broader market conditions or diminishing returns on speculative trades.
If this trend persists, there is a possibility of Dogecoin experiencing further price decreases. On the other hand, a revival in volume could signal renewed interest and potentially uplift prices, indicating a market recovery.
Decrease in DOGE Network Activity Raises Questions on Price Movement
As trading volume declined, there was also a noticeable reduction in the creation of new addresses, dropping from a peak of 1.29 million new addresses in November to only 30,815 recently, as highlighted by Ali on X. This decline reflects a significant decrease in network activity.
In November, the spike in new address creations coincided with higher DOGE prices. However, subsequent months witnessed a stark decline in both new addresses and the price of DOGE, showing a correlation between the two.
Following these declines, a further price drop is anticipated, but there might be a potential turning point for Dogecoin as indicated by the TD Sequential indicator flashing a buy signal.
This signal implies that the current downward trend could be nearing its end, possibly setting the stage for a rebound. Presently, DOGE is showing stability around $0.21267.
The stabilization in price, along with the signal from the indicator, suggests that buyers could be gaining traction, with the potential for a price increase if bullish momentum takes hold.
Historically, such signals have often preceded price hikes, particularly when accompanied by positive market sentiment. Failure to sustain this signal might see DOGE continuing its recent downward trajectory.
If DOGE manages to hold above $0.21267 and breaks out from its current levels, it could encounter higher resistance levels and revisit previous price highs. Conversely, a failure to maintain this support could result in further declines, potentially pushing prices below recent lows and testing lower support levels.