According to the Blockchair on-chain data service, Dogecoin's daily circulation has dropped significantly after reaching a three-month high previously, on Oct. 29. The main reason may be the memecoin's price action.
High network activity was followed by large volumes on the market, including a 43% price increase. Right after reaching an almost three-month high, Doge retraced by almost 12% and then only moved down by 5%.
With high volatility hitting the markets, more traders and investors begin to move their digital assets from exchange wallets to personal ones and vice versa. With the price stabilizing and volatility continuously decreasing, market participants tend to "leave" their funds on exchanges or wallets, without moving them, which then causes a decrease in daily circulation.
The large movements on the market are quite often correlated with the value growth of digital assets. Since daily circulation is measured in volume, rather than in the number of transactions, whenever whale-tier wallets move their assets, the market should expect an increase in volatility.
At press time, Dogecoin is trading at $0.28 with a 1.4% loss. Previous volume numbers have now recovered back to an average of 1.5 billion on Binance.
Alex Dovbnya
Denys Serhiichuk