DOGE: Bull or Bear Market?

DOGE: Bull or Bear Market?


Learn why the recent surge in transactional activity on the Dogecoin network may not be helping its price prospects, and why whales are turning away from DOGE, potentially triggering a negative price prediction.

Dogecoin (DOGE) price has stagnated betwixt $0.072 and $0.075 zone during the previous 3 weeks. The past few DRC-20 Ordinals hype has seen transaction volumes skyrocket to unprecedented highs.  On the other hand, on-chain data show how this seems to be undermining the chances of a positive  tendency Dogecoin (DOGE) price breakout. 

On May 22, 2023, the Dogecoin (DOGE) blockchain tech network had more than 1.3 Million daily transactions for the 1st time in history. On the other hand, on-chain data shows DRC-20 Ordinals hype has not impacted Dogecoin (DOGE) price prospects materially. 

With Dogecoin (DOGE) transaction charges still on the boost, will this trigger a more negative Dogecoin (DOGE) price prediction?  

Dogecoin (DOGE) Price Remains Stagnant Regardless of Spikes in Transaction

Although while Dogecoin (DOGE) has made headlines for its growing network activity, DOGE’s price has remained relatively stagnant.

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The chart below shows how Dogecoin (DOGE) network activity soared by 1400%, from 88,450 transactions on May 14  to 1.35 Million transactions recorded on May 22. In the meantime, Dogecoin (DOGE) price has remained relatively unchanged at $0.073 during this period.

Quite literally, Transaction Count sums up the number of transactions that occur on a blockchain tech network within a specific trading period. 

Historically, Dogecoin (DOGE) price has increased whenever there is a sustained spike in transactional activity. Hence, the worrying negative divergence betwixt Price and Transaction Count observed over raises concerns. 

It could imply that these new DRC-20 Ordinals transactions are taking up valuable block space but not adding material economic value to the network. 

Whales are Turning Away From Dogecoin

A major criticism of Ordinals by Bitcoin (BTC) maximalists is the unintended consequence of growing network charges. This phenomenon now seems to be likewise rearing its head on the Dogecoin (DOGE) network. 

Betwixt May 10 and May 22, the average transaction fees on the Dogecoin (DOGE) network increased three-fold. 

Dogecoin Price Prediction - May 2023 - Total Fees
Dogecoin (DOGE) Price Prediction – May 2023 – Total Charges. Source: IntoTheBlock

Total Charges aggregate the total amount users spend to transact on a blockchain tech during a given period. And once transaction charges boost, it dissuades users from carrying out transactions leading to a fall in network traction and, in the end, a price decline. 

In confirmation of this thesis, the chart below shows that Large Transactions on the Dogecoin (DOGE) network started to decline around May 13. This coincides with the period that DRC-20 Ordinals transactions started to spike. 

Dogecoin Price Prediction - May 2023
Dogecoin (DOGE) Price Prediction – May 2023 – Large Transactions. Source: IntoTheBlock

This  implies that whale investors are conducting fewer transactions in reaction to the relative network congestion and fee spikes caused by the “Doginals”

Whale transactions are important to any digital currency’s price prospects, supplying much- required liquidity. Hence, if the circumstances remain unchanged, DOGE’s price could enter another downward spiral in the coming days. 

Dogecoin (DOGE) Price Prediction:  The $0.07 Support is Critical

Reports by IntoTheBlock’s In/Out of the Money Price distribution data, the bears will likely force a Dogecoin (DOGE) price downsizing to $0.07.

On the other hand, the 56,870 addresses that purchased 853 Million Dogecoin (DOGE) crypto tokens are expected to offer considerable support at that critical $0.07 zone. 

On the other hand, if that support caves as expected, then the Dogecoin (DOGE) price will likely slump further toward $0.062. 

Dogecoin (DOGE) Price Prediction - May 2023
Dogecoin (DOGE) Price Prediction – May 2023, Source: IntoTheBlock

Still, the bulls can negate this pessimistic narrative if the Dogecoin (DOGE) price can break out over $0.078.

On the other hand, as seen over, some of the 43,530 investors that purchased 28.9 Billion coins at the maximum price of $0.078 range could resist. 

This large cluster of possible break-even sellers could easily stall any price movements higher while representing a substantial resistance zone.

On the other hand, if that resistance level fails, the Dogecoin (DOGE) bulls can expect the price to go up to $0.085.

Source

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