Whom Dogecoin moon? On-chain data and trading volumes point to soon

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The cryptocurrency market has been on a wild ride so far in 2021 as several subsectors including decentralized finance (DeFi), non-fungible tokens (NFTs), memecoins and layer 2 solutions locked their total value and token prices soared to new highs are.

One of the biggest success stories of the year was Dogecoin (DOGE), a simple “joke” cryptocurrency that has become a darling of the cryptocurrency sector. Interestingly, the project has regained momentum over the past month, and several data points suggest that sentiment for the DOGE is becoming increasingly bullish.

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Data from Cointelegraph Markets Pro and TradingView show that DOGE’s price is up 120% from its $ 0.159 low on July 20 and hit an intraday high of $ 0.35 on August 16, during its 24- Hourly trading volume increased by 63%. rose $ 8.6 billion.

DOGE / USDT 4 hour chart. Source: TradingView

Three reasons why analysts and traders are developing a more optimistic outlook for DOGE are the increase in on-chain activity, the increasing trading volume on the top exchanges and the increasing attention of well-known influencers.

On-chain activity shows increased usage

The ability to attract new token holders is one of the most important factors in the long-term viability of a cryptocurrency project as new users help increase token speed and overall demand.

As can be seen from the following tweet from Philip Gradwell, Chief Economist at Chainalysis, Dogecoin adoption is currently at its highest level since the 2017 bull market, with new users who have held the token for less than six months currently 25% of the circulating Keep offer.

A follow-up tweet from Gradwell provided deeper insights into Dogecoin’s on-chain activity, which had an average of 32,000 Daily Active Users (DAUs) in 2021.

Dogecoin on-chain daily active users compared to the price. Source: Twitter

Gradwell said:

“Doge had an average of 32,000 Daily Active Users (DAUs) on the chain in 2021 and that has moved with price. Between the percentage change in the DAUs and the percentage change in the Doge price in 2021, there is so far an R value of 0.7.

Exchange volumes increase

A second reason for analysts increasing attention to DOGE is the increasing trading volumes on some of the largest exchanges, including Coinbase.

As can be seen in the following tweet from Pentoshi, a pseudonymous Twitter analyst, DOGE’s 24-hour trading volume on Coinbase averaged $ 200 million per day in the previous week.

Coinbase is the largest fiat ramp in the United States, and this surge in trader activity could be a sign that retail investors are again investing in DOGE and possibly other tokens under $ 1.

Related: Coinbase beats earnings estimates as analysts say regulation will “stifle” innovation

Mark Cuban promotes the benefits of Dogecoin

A third reason for the bullish sentiment around Dogecoin are the recent comments from well-known influencers such as Mark Cuban, who is again promoting his legion of Twitter followers for the advantages of Dogecoin as a payment method.

Kuban’s focus on Dogecoin drew the ire of some Bitcoin (BTC) fans who conjured it up Shark tank star just “Buy a Stack of Bitcoin and Stop the Doge Shill,” a sentiment that Cubans responded directly to, indicating that the decision largely responded to user demand.

Cuban said:

“I don’t scold Doge. I pay for my company’s products and services. Where we allow people to pay in ANY crypto, 95% of sales are made in DOGE. Customers CHOOSE to use DOGE. We can argue about anything and everything about BTC, but right now DOGE is people’s way of paying. “

The positive shift in momentum for Dogecoin was also seen in Cointelegraph Markets Pro’s VORTECS ™ data, which began to see a bullish outlook on August 9, ahead of the recent price hike.

The VORTECS ™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points such as market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS ™ ‌ ‌Points‌ ‌ (green) ‌ vs.‌ DOGE ‌Price.‌ ‌Source: ‌ ‌‌Cointelegraph‌ Markets‌ ‌Pro

As can be seen in the graph above, the VORTECS ™ Score for DOGE climbed into the green on August 7th and reached a high of 72 on August 9th, about 24 hours before the price rose 44% over the next six days.

Rising on-chain activity and 24-hour exchange volumes, as well as the return of DOGE advertising by popular influencers, have prepared Dogecoin for potentially its second bull market rally in 2021.

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every step of investing and trading involves risk and you should do your own research when making a decision.