Wen Dogecoin moon? Data on chain and trading volumes soon suggest

The cryptocurrency market has seen a wild ride so far in 2021 as several sub-sectors like decentralized finance (DeFi), NFTs, meme coins ...

The cryptocurrency market has seen a wild ride so far in 2021 as several sub-sectors like decentralized finance (DeFi), NFTs, meme coins and layer two solutions saw their TVL values ​​and tokens soar to new heights.

One of the biggest success stories of the year was Dogecoin (DOGE), a simple ‘joke’ cryptocurrency that has turned into a darling in the cryptocurrency industry. Interestingly, in the last month the project is again gain momentum and several data points suggest sentiment for the DOGE is becoming increasingly bullish.

Data Cointelegraph Markets Pro and TradingView shows that since hitting a low of $ 0.159 on July 20, the price of DOGE has risen 120% to an intraday high of $ 0.35 on August 16, as its 24-hour trading volume has jumped 63% to $ 8.6 billion.

DOGE / USDT 4 hour chart. Source: TradingView

The three reasons analysts and traders are developing a more optimistic outlook for DOGE include increased on-chain activity, increased trading volumes on major exchanges, and increased attention from major influencers.

Chain activity shows increased usage

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

As seen in the following tweet from Philip Gradwell, the Chief Economist of Chainalysis, Dogecoin adoption is currently at its highest level since the 2017 bull market with new users holding the token for less than 6 months. months and currently hold 25% of the outstanding supply. .

A follow-up tweet from Gradwell provided a deeper insight into Dogecoin’s on-chain activity, which averaged 32,000 Daily Active Users (DAUs) in 2021.

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

Gradwell said,

“Doge had an average of 32,000 on-chain Daily Active Users (DAUs) in 2021, and that has moved along with the price. There is an R-value of 0.7 between the percent change in DAU and the percent change in the Doge price in 2021 so far. “

Trade volumes are on the rise

A second reason for the increased attention analysts are giving DOGE is the increase in trading volumes on some of the largest exchanges, including Coinbase.

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

Coinbase is the biggest fiat ramp in the United States and this spike in merchant activity could be a sign that retail investors are cramming into DOGE and possibly other less than $ 1 tokens.

Related: Coinbase beats earnings estimates as analysts say regulation ‘will stifle’ innovation

Mark Cuban touts the benefits of Dogecoin

A third reason for the bullish sentiment surrounding Dogecoin is the recent comment from renowned influencers like Mark Cuban, which once again touts the benefits of Dogecoin as a payment rail to its legion of Twitter followers.

Cuba’s focus on Dogecoin angered some Bitcoin fans who implored the Shark Tank star rightly said: “Buy a stack of Bitcoin and stop the doge shill,” a sentiment to which Cuban responded directly and stressed that the move was largely in response to user demand.

Cuban noted,

“I’m not afraid of Doge. I shill the products and services of my companies. Where we allow people to pay in ANY crypto, 95% of sales are in DOGE. Customers CHOOSE to use DOGE. We can discuss anything and everything about BTC, but right now DOGE is the people’s way to pay. “

The positive dynamic change for Dogecoin was also recorded in the VORTECS ™ data of Cointelegraph Markets Pro, which began to detect 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 including market sentiment, trade volume, recent price movements and activity Twitter.

VORTECS ™ ‌ ‌Score‌ ‌ (green) ‌ ‌vs.‌ DOGE ‌price.‌ ‌Source: ‌ ‌‌Cointelegraph‌ ‌Markets‌ ‌Pro‌ ??

As shown in the graph above, the VORTECS ™ score for DOGE climbed into the green on August 7 and peaked at 72 on August 9, about 24 hours before its price rose 44% over the last few years. next six days.

The increase in on-chain activity and 24-hour trading volumes, along with the return of the DOGE promotion by popular influencers, allowed Dogecoin to potentially see its second bullish rally in 2021.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.