Dogecoin (DOGE) holders are bracing for a rebound after a 25% correction in February. In spite of the recent price downswing, network activity has been on the rise. Will it be enough to spur the bulls into action?
Positive Divergence as Network Activity Soars
Over the last 30 days, the world’s largest meme coin by market capitalization has dipped by nearly 25%. Still, a critical analysis of on-chain data suggests that increased network activity could spur a rebound.
Data compiled by cryptocurrency analytics firm Santiment has shown a recent spike in Daily Active Addresses on the Dogecoin network.
Since March 1, the number of Daily Active DOGE Addresses has spiked by 40% while prices dropped. The positive divergence between the Dogecoin price and Daily Active Addresses suggests that new crypto market participants may be attempting to buy the dip.
Daily Active Addresses measures the number of unique addresses interacting on a network daily. Historically, previous DOGE rallies have often been preceded by spikes in the Daily Active Addresses.
Similarly, a closer look at the volume of transactions on the DOGE network in recent days also paints an optimistic picture. The Daily DOGE Transaction Count has doubled within the last seven days to reach its highest daily throughput volumes in 2023.
Judging by the historically positive correlation with the price, it appears reasonable for DOGE holders to expect a price rally to follow the recent trend.
Dogecoin (DOGE) Price Prediction: Stiff Resistance Ahead
Regarding price projections, IntoTheBlock’s Global In/Out of Money (GIOM) data below offers relevant insight.
Currently, only 24.5% of DOGE holders are in profitable positions. This suggests that most crypto investors may avoid selling at big losses around the current prices.
On-chain data shows that the next price rally for Dogecoin will likely be tested around the $0.075 area, where 81,000 addresses holding 35 billion DOGE may decide to take profits.
Still, if Dogecoin crosses this obstacle, it can encroach $0.084, where nearly 400,000 addresses hold 34 billion tokens.
Alternatively, if things take a bearish turn, the 333,000 addresses that bought 4.8 billion DOGE around $0.64 will offer significant support. But given the low volume around this level, Dogecoin may slide further in the event of a correction to around $0.56, where 435,000 addresses have bought 6.7 billion DOGE.
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