In November 2024, the number of Dogecoin (DOGE) active addresses spiked to 1.75 million. This surge in network activity coincided with DOGE’s price increase to $0.46.
But since then, the same metric has been much lower, leading to a correction in the meme coin’s price. Year-to-date (YTD), Dogecoin is down 37.91%. Here is why the cryptocurrency might struggle to see recovery soon.
Dogecoin Active Addresses Stay Flat
Active addresses are a metric used to measure the engagement level on a blockchain. When they increase, it means that more users are participating in transactions. On the other hand, a decline in active addresses indicates fewer users sending and receiving on the blockchain.
According to Santiment data, Dogecoin’s 24-hour active addresses have fallen to 87,100 as of this writing, a level similar to Nov. 25.
Historically, declining network activity signals limited price movement. If active addresses stay flat, DOGE’s price may continue to hover in the same range.
At press time, the memecoin changes hands at $0.20, which is contrary to the expectations the broader market had earlier in the year.
DOGE Stuck in a Descending Channel
Looking at the price action from a technical angle, the 4-hour chart shows that DOGE trades within a descending channel. A descending channel is a pattern formed by two downward trendlines,
The upper trendline is resistant in this pattern, while the lower one represents support. On the same chart, the Relative Strength Index (RSI) has declined below the 50.00 neutral region, indicating that the momentum around DOGE is bearish.
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Should this remain the same, DOGE’s price might find it challenging to break past the resistance of nearly $0.22.
DOGE Price Analysis: Indicators Still Bearish
As per its short-term outlook, the Supertrend indicator supports the thesis that DOGE might fail to see a breakthrough soon. The Supertrend is a technical indicator that measures trend direction.
The market will increase if the line is green and below the price. If it is red and above the price, the market will decrease.
On the daily chart, the red line of the Supertrend is above Dogecoin’s price, indicating that the coin has faced notable resistance.
Should this remain the same, DOGE will likely decline to $0.18. However, if Dogecoin’s active addresses increase, this bearish forecast might not come to pass.
In that case, the rising user engagement could drive higher demand for the coin.
This could drive DOGE above the 0.236 Fibonacci retracement point at $0.24. If successfully breached, the cryptocurrency’s value could rise toward $0.34.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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