July 21, 2024
Dogecoin Adoption

On-chain data suggests the Dogecoin adoption has been picking up recently as a large number of new addresses are popping up on the network.

Dogecoin Is Observing A High Number Of Daily New Addresses Currently

In a new post on X, analyst Ali talked about how the Dogecoin network activity has been looking like recently in terms of new address creation. A “new address” is one that has taken part in some kind of transaction activity for the first time.

Some of the new addresses that pop up on the network every day belong to the existing users, who may be creating additional addresses for privacy purposes or simply moving to a different wallet.

The rest of the new addresses, though, are being created by fresh investors entering into the market, so the daily total value of the new addresses can provide hints about how the adoption of the meme coin is coming along.

The below chart shows the trend in this metric for Dogecoin over the last couple of months:

Dogecoin Adoption

The value of the metric appears to have seen some overall uptrend in the last few weeks | Source: @ali_charts on X

As displayed in the above graph, the daily number of new Dogecoin addresses started spiking last month and has since been consistently setting new highs as the metric continues in an overall upward trajectory. This would suggest that the network has been receiving a consistently high influx of new investors recently.

Adoption is always a constructive sign for any cryptocurrency, as fresh hands can help build a solid foundation that future uplifts in the price can sustainably grow off. Thus, it’s crucial for assets to continue to look attractive to new users, something that Dogecoin appears to have been doing fine recently.

Any positive effects on the price that come through adoption, though, generally only appear in the long term. Rather, depending on the nature of the adoption, it can in fact impart a negative influence on the cryptocurrency in the short-term.

This happens when too many new users join the blockchain in a short amount of time, only buying into the asset due to FOMO. Recently, the on-chain analytics firm Santiment also discussed this fast pace of address creation on the Dogecoin network, noting that Bitcoin (BTC) is also displaying a similar trend.

Dogecoin & Bitcoin

The trend in the addresses of the top assets in the sector | Source: Santiment on X

“Though network growth is a great sign long-term, this rapid rate of new wallets is a FOMO sign to be slightly cautious of,” explained the analytics firm in the post.

From the chart, it’s visible that Cardano (ADA) is the only asset among the top cryptocurrencies by market cap that’s not displaying any sort of address growth at all.

DOGE Price

Since the rally Dogecoin observed during the starting third of the month, the asset has gone rather stale, as its price has continued to move sideways around the $0.093 level during the last two weeks.

Dogecoin Price Chart

DOGE hasn't enjoyed any upwards momentum in recent days | Source: DOGEUSD on TradingView

Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Santiment.net, IntoTheBlock.com

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

Source link