Dogecoin (DOGE) is exposed to a significant drop in prices due to its network activity, which has remained unchanged for some time. Despite growth growth in some other metrics, this chain metric remains crucial to the development of the most crucial meme coin.
Dogecoin network activity at low levels
Data from the market intelligence platform To the Block shows that Dogecoin’s net growth is bearish and has not experienced any noticeable growth recently. Further data from the platform shows that the number of modern addresses on the network has fallen by almost 10% over the past seven days.
WX (formerly Twitter) fastingIntoTheBlock has provided more information on the slowdown in Dogecoin network activity and how the meme coin has had to rely on existing holders until now. According to the platform, the number of modern addresses has been slowly decreasing, indicating a lack of modern investors joining the network.
With that, the number of transactions on the network has been mixed over the past three months. IntoTheBlock has seen a few notable increases, but all of them have been short-lived, further underlining that Dogecoin has not seen a steady influx of delayed modern participants to the network.
Considering the slowdown number of modern addressesIt is also possible that these significant spikes in Dogecoin transactions were triggered by existing addresses on the network rather than modern holders. This slowdown in modern addresses explains why Dogecoin’s price action was rather unimpressive, with the leading meme coin unable to replicate the price gains of other meme coins such as Pepper (PEPPER).
Meanwhile, IntoTheBlock has turned its attention to Dogecoin diamond owners role in keeping the price afloat amid lower transaction volume for the meme coin. These long-term holders, whose average holding time is over two years and three months, continue 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 the price was still below $0.10.
Possible explanations for DOGE network growth slowdown
A possible explanation for the slowdown Dogecoin Network Activity is that modern investors do not see much growth potential for DOGE at its current level. As such, they are leaning towards newer meme coins that they believe will provide them with higher profits. Indeed, Dogecoin is not doing well compared to these newer meme coins.
DOGE has seen a year-on-year (YTD) escalate of just over 11%. Meanwhile, coins such as Dog Wife (WIF) AND Pepper (PEPPER) have YTD gains of over 1000% and 500% respectively. The meme coin market is also becoming increasingly saturated, especially considering the number of meme coins being launched Solana ecosystem daily. As such, it is understandable that Dogecoin no longer enjoys the attention it once did.
At the time of writing, Dogecoin is trading at around $0.099, up almost 2% in the past 24 hours, according to data data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
