Altcoin market sentiment has been fragile lately. The rally in mid-March pushed some cryptocurrencies to new local highs, but they were unable to sustain the move. Dogecoin (DOGE) is one of many altcoins that failed to set new records. It has been trading in a range since late February.
Following a strong downward trend in October, this horizontal price trend over the past two months appeared to represent a phase of consolidation. However, this does not mean that there will not be new price declines, as this will depend on Bitcoin (BTC) and market conditions.
The new address growth metric uses the growth and contraction in the number of non-zero DOGE wallets to map on-chain growth. The decline in wallets holding non-zero Dogecoin indicated that wallets would be cleared.
Growth tends to increase when: dogecoin It is having a strong rally. Network growth has gradually slowed over the last eight months.
The ongoing process may be reminiscent of 2024 consolidation in terms of address growth. However, there were differences on the price front; most importantly two month consolidation It is above the $0.088 support.
High activity warns against profit taking on DOGE
Since the crash in February, active addresses and transaction volumes have seen an increase in activity from March 10-19. During this period, Bitcoin It was heading towards the local high of $76,000 and pushed altcoins higher as well.
The increase in activity as DOGE prices approached local highs of $0.104 reflected a tendency to take profits and exit the market. The limited upside and repeated tests of the $0.09 local support zone were worrisome for the bulls.
Finally, the 3-month average coin age has been decreasing since January. This showed that short-term holders were selling memecoin. Additionally, the 3-month MVRV was near the 8% decline mark that has led to a sell-off in recent months.
On the other hand, the 1-year average coin age has been on the rise since February. This indicates accumulation from long-term owners following sales from October to February.
It is not yet known whether this accumulation is enough for a rise beyond the local peaks of $0.104. Short-term investors will likely sell aggressively in the face of such a bounce, and investors should be careful about expecting too much from any potential relief rally.
Final Summary
- New address growth was low and similar in profile to the downtrend in 2024; This shows that DOGE may once again hit new lows.
- Long-term holders have been accumulating memecoin since February, but this may not result in a major rally anytime soon.
