Dogecoin (DOGE) is likely to experience a significant drop in prices due to its network business, which has remained stable for some time now. bullish peak in some other measures, this on-chain metric remains vital to the growth of the main meme coin.
Dogecoin network activity is down
Data from the market intelligence platform In the block shows that the Dogecoin network’s net growth is bearish and has not seen any notable increase recently. Other data from the platform shows that the number of new addresses on the network has dropped by nearly 10% over the past seven days.
In an X (formerly Twitter) jobIntoTheBlock provided more information on the slowdown in Dogecoin network activity and how the meme coin has had to rely on existing holders so far. According to the platform, the number of new addresses has been slowly decreasing, indicating a lack of New investors join the network.
Thanks to this, the number of transactions on the network has been mixed over the past three months. IntoTheBlock noted a few notable spikes, but they were all short-lived, further highlighting how Dogecoin has recently failed to see a sustained influx of new participants on the network.
Given the slowdown in the number of new addressesIt is also possible that these notable spikes in Dogecoin transactions were triggered by existing addresses on the network rather than new holders. This slowdown in new addresses explains why Dogecoin’s price action has been rather unimpressive, with the leading meme coin unable to replicate the price gains of other meme coins like Grandpa (PEPE).
Meanwhile, IntoTheBlock highlighted Dogecoin diamond holders role in keeping its price afloat despite the meme currency’s low transaction volume. These long-term holders, who have an average holding period of more than two years and three months, have continued to hold, even though people may not be actively using the network.
Data from IntoTheBlock shows that 68.11% of Dogecoin holders are still in the money despite the meme coin’s unimpressive price action. Many of these investors bought DOGE when it was still trading below $0.10.
Plausible Explanations for Slowing DOGE Network Growth
A plausible explanation for the slowdown of Dogecoin Network Activity The problem is that new investors don’t see much upside for DOGE at its current level. So they’re turning to new meme coins, which they believe will give them more gains. Indeed, Dogecoin hasn’t held up well compared to these new meme coins.
DOGE has seen a year-to-date (YTD) gain of just over 11%. Meanwhile, coins like Dog Hat (WIF) And Grandpa (PEPE) have YTD gains of over 1,000% and 500%, respectively. The meme coin market is also becoming increasingly saturated, especially with the number of meme coins being launched in the Solana Ecosystem It is therefore understandable that Dogecoin no longer receives the attention it once deserved.
At the time of writing, Dogecoin is trading at around $0.099, up nearly 2% in the past 24 hours, according to data from CoinMarketCap.
Featured image created with Dall.E, chart by Tradingview.com
