It is common for crypto to go bullish as the crypto market is very volatile. But is that the case with Dogecoin already?
Many analysts are convinced the Dogecoin scene is bullish judging from the On-chain activity and trading volumes from major exchanges.
Although 2020 was in the spotlight, 2021 has also been a rollercoaster for the crypto scene as the crypto market has taken a different turn. Currently, there are more players in the market such as decentralized finance, NFTs, memecoins, and two-layer solutions. This has pushed crypto assets to new highs as investors are spoilt for choice.
The rise of Dogecoin
The Dogecoin success story started as a joke after it was endorsed by Elon Musk on Twitter. Since Elon Musk is highly influential, many took his word seriously and sought the altcoin. This was rumored to affect Bitcoin making it drop in value at the time. The last one month was a breakthrough month for Doge as it gained high momentum and several pointers suggest it might be headed for being bullish.
A one-month period made a big difference for Doge. According to data from TravingView and Cointelegraph Markets Pro, on July 20 the coin hit a low of $0.159 to $0.35 on August 16, which is a 120% increase. On August 16, the 24-hour trading volume increased by 63% pushing the figures to $8.6 billion.
The main reasons that may be pushing the price up are the on-chain activity, high trading volumes, and endorsements from industry influencers.
Increased On-chain activity
Dogecoin has experienced high adoption. The fact that the coin can attract new users is an indicator that there is a long-term viability of the token. This helps to project the demand of the token up.
According to the chief economist at Chainalysis, Philip Gradwell, Dogecoin adoption is the highest since 2017. The total number of new users accounts for 25% of the total supply. New investors have increased by 16% since July 2020.
From On-chain analysis, there are up to 32,000 daily active users in 2021.
High trading volumes
Doge has high trading volumes in major exchanges such as Coinbase. There is an average daily trading volume of up to $200 million, according to Pentoshi, a Twitter analyst. Coinbase being one of the big exchanges, says a lot about the market embracing Doge.
Endorsements from Influencers
Apart from Elon Musk who talked highly of Dogecoin, Mark Cuban also talked of the benefits of Doge through a Tweet. He highlighted that Doge’s simplicity and imperfections make it the best. It is cheap and you can either hold it or spend it.
He talked in response to people’s motives who were trying to convince him to invest in Bitcoin instead. He mentioned the advantages of Doge are more comparatively and that is why up to 95% of users are currently paying for services in his company using Doge.