Traders Not Showing Dogecoin FOMO, Good Sign For Rally?
01 Abril 2024 - 1:00PM
NEWSBTC
On-chain data suggests traders haven’t been showing FOMO towards
Dogecoin despite the latest rally, a sign that could be positive
for its continuation. Dogecoin Total Amount Of Holders Has Remained
Flat Recently According to data from the on-chain analytics firm
Santiment, FOMO, which would normally be associated with tops, has
been absent from the Dogecoin market recently. The indicator of
relevance here is the “Total Amount of Holders,” which, as its name
suggests, keeps track of the total number of DOGE addresses that
are carrying a non-zero balance right now. Related Reading: What’s
A Simple Strategy For Buying & Selling Bitcoin? This Analyst
Answers When the value of this metric goes up, it can be because of
a number of reasons. A major one would naturally be fresh adoption,
as new investors coming into the sector would open up new addresses
and add balance to them, thus raising the indicator’s value. Other
reasons can include existing users reconsolidating their holdings
among multiple addresses (usually for a purpose like privacy) or
old investors coming back to reinvest in the meme coin. In general,
whenever the metric shows this kind of trend, it means that some
net adoption of the asset is taking place, which can be a positive
sign in the long term. On the other hand, a decline in the
indicator implies some holders may have decided to exit from the
cryptocurrency as they have completely cleared out their addresses.
Now, here is a chart that shows the trend in the Dogecoin Total
Amount of Holders over the last few months: The value of the metric
appears to have been moving sideways for a while now | Source:
Santiment on X As displayed in the above graph, the ‘Total Amount
of Holders’ for Dogecoin has been flat for many weeks now, implying
that the adoption of the meme coin has hit the brakes.
Interestingly, this sideways trajectory has come despite the fact
that DOGE’s price has gone through some volatile price action
during this period. Generally, events like rallies are attractive
to traders, so a notable amount of them tend to jump into the asset
during them. It would appear that the traders have either not been
paying attention to the recent DOGE rally or just not taking it
seriously. In the past couple of weeks, the ‘Total Amount of
Holders’ for the meme coin has gone up by only 0.21%, despite the
fact that the price has rallied more than 40% in the same window.
Historically, when a large number of traders join the blockchain at
once during price surges, it’s a sign that FOMO around the asset is
spreading. Usually, the meme coin’s price tends to go against the
expectations of the majority, so when there is widespread FOMO, a
top can become likely to take place. Related Reading: Coinbase Sees
Largest USDC Inflow Ever, What This Could Mean For Bitcoin As there
hasn’t been any such FOMO for Dogecoin recently, it’s possible that
it could be a positive sign for the rally’s continuation. There is
also another signal brewing, however, that may not be so
constructive. From the chart, it’s visible that the Mean Dollar
Invested Age, a metric that keeps track of the average age of DOGE
investments, has plunged recently, implying that the experienced
hands have been on the move. When this signal formed earlier in the
year, the coin’s price approached the top not too long after. DOGE
Price Dogecoin had surpassed the $0.22 level earlier, but it seems
the asset has gone through some drawdown as it’s now back under
$0.21. Looks like the price of the coin has been going up in recent
days | Source: DOGEUSD on TradingView Featured image from
Kanchanara on Unsplash.com, Santiment.net, chart from
TradingView.com
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