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The variety of on-chain signals that Dogecoin is currently displaying could have a big impact on its price trajectory. The meme coin is still popular, but its on-chain data provides important information that might predict whether DOGE's price rises or falls further.
The price of DOGE is expected to be influenced by three main on-chain signals, which we will examine here.
1. High volume of transactions: The quantity of major transactions is one of the most informative on-chain indicators. A total of 983 large transactions totaling 5.56 billion DOGE were made on Dogecoin in the last 24 hours.
Despite constituting a sizable amount, this volume is lower than the seven-day high of 10.09 billion DOGE. A decline in whale activity is suggested by the decline in the volume of large transactions, which could be a bearish indication for DOGE. The market may become less liquid and more volatile as a result of whales' diminished participation, which frequently causes large price swings.
2. Concentration of big owners: The concentration of DOGE held by large holders, which is currently at 62%, is another important indicator. This metric shows that a sizable portion of the entire supply is controlled by a small number of wallets.
Tomiwabold OlajideA high concentration among large holders can have two effects: if these holders are long-term investors, it can promote price stability, however, if they decide to sell off large quantities, it could also cause sharp price movements. The degree of concentration currently in place indicates that the price of DOGE is very vulnerable to decisions made by a small number of powerful holders.
3. Netflows and network activity: The exchange netflows and network activity finally offer more information about the price potential of DOGE. Although the inflow shows some interest in DOGE, the network's growth appears to be declining, indicating that fewer people are joining it. This can cause user adoption to stagnate, which would reduce DOGE's potential for long-term growth and perhaps cause a price drop.
Alex Dovbnya