- Dogecoin witnessed a surge in price as transaction volumes grew.
- However, sentiment around the DOGE token fell significantly during this period.
Dogecoin [DOGE] witnessed a massive uptick in price over the last few weeks despite the overall market seeing volatility. One of the reasons for this could be the high transaction volume occurring on the network.
Surge in volume
Based on data from Santiment, there was a notable surge in Dogecoin transaction volume, escalating from 1.22 billion to 9.20 billion within a span of 48 hours.
Coupled with this, the overall velocity around DOGE had also increased. This indicated that the frequency with which DOGE was being transferred had also grown over the last few days. The spike in velocity could add more momentum to DOGE’s recent rally.
Moreover, the total number of holders that were accumulating DOGE had also grown. This meant that the recent surge in price was caused by new entrants in the market and it wasn’t caused by increased accumulation from old holders.
The interest shown by new addresses indicated the growing popularity of DOGE across the crypto sector. However, there were other factors that could impede DOGE’s growth going forward.
AMBCrypto’s analysis of Santiment’s data showcased that the number of daily active addresses on the Dogecoin network had declined significantly over the past few days.
The declining activity on the network showcases a falling interest in the overall Dogecoin ecosystem. If the declining interest in the ecosystem persists, it could have dire consequences for DOGE in the long run.
Source: Santiment
Some challenges ahead
Another factor that could impact DOGE would be the social volume around the token. As DOGE is a memecoin, a large part of its price is driven by social activity.
Recent data indicated that social volume around DOGE had fallen considerably over the last few days. Moreover, the weighted sentiment around the token had also declined.
This meant that the number of positive comments around DOGE had reduced, whereas the negative comments around DOGE had surged. These factors may affect DOGE’s chances of rallying.
Moreover, the memecoin sector has grown significantly over the last few months in both high and low market cap areas.
Read Dogecoin’s [DOGE] Price Prediction 2024-25
Memecoins such as PEPE and WIF have amassed massive popularity and have gained significant standing in the sector.
The Solana memecoin frenzy has also attracted a large amount of users. This can drive liquidity and interest away from DOGE in the future.
Source: Santiment