Dogecoin (DOGE), the Shiba Inu-inspired meme coin, has been making waves in the past week. After a month-long slump, DOGE has surged by 6%, currently trading around $0.12. This uptick is accompanied by a rise in network activity, potentially indicating a buying opportunity for investors.
Increased Demand Fuels DOGE’s Rise
The recent price increase seems to be driven by a surge in demand. On-chain data reveals a 20% increase in daily active addresses involved in DOGE transactions over the past week. Additionally, the number of new addresses created to trade the meme coin has also spiked by 17%. This rise in network activity suggests growing interest from traders, potentially fueling a positive market sentiment for DOGE.
Is DOGE Undervalued?
Interestingly, Dogecoin’s current price might present a good entry point for investors. The Market Value to Realized Value (MVRV) ratio, a metric that compares market capitalization to the average acquisition price of all DOGE in circulation, currently sits at negative values for both 30-day and 365-day moving averages. This suggests that, on average, DOGE is trading below the price at which most holders acquired their coins. In simpler terms, the current market price might be undervalued compared to the historical buying behavior.
Is This a Sustainable Rally?
While the recent surge and network activity growth are positive signs, it’s crucial to remember that the cryptocurrency market remains volatile. Factors like broader market trends and whale activity can significantly impact DOGE‘s price. Investors considering entering the market should conduct thorough research and employ proper risk management strategies.
Also Read: Dogecoin Up 3.9%, Can it Escape the Downtrend? Analyst Says Brace for a Ride to $0.09!
Dogecoin vs. Shiba Inu: A Tale of Two Meme Coins
For those interested in the meme coin space, it’s important to understand the differences between Dogecoin and its rival, Shiba Inu (SHIB). While both share a playful, meme-inspired origin story, they have distinct technical specifications and use cases.
Conclusion
Dogecoin’s recent rally has sparked renewed interest in the meme coin. The rise in network activity and potentially undervalued position based on MVRV ratios suggest a possible buying opportunity. However, investors should exercise caution and conduct their own research before making any investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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