Dogecoin has been trading within a range since late February, failing to sustain a mid-March rally. On-chain data reveals a slowdown in new address growth and high network activity that suggests profit-taking, while long-term holders have been accumulating since February. The memecoin’s future price direction remains heavily dependent on broader market conditions and Bitcoin.
The altcoin market sentiment has been fragile lately. Dogecoin is one of many altcoins unable to make new highs after the recent rally.
After a strong downtrend from October, the past two months of sideways price action represented a consolidation phase. New price lows would depend on Bitcoin and overall market conditions.
The new address growth metric, which maps on-chain expansion, has progressively slowed over the last eight months. A drop in non-zero Dogecoin-holding wallets hinted at a purge of wallets.
The ongoing phase may be reminiscent of the 2024 consolidation in terms of address growth. On the price front, the primary difference was the two-month consolidation above the $0.088 support.
Since the February crash, active addresses and transaction volumes saw a hike in activity from March 10-19. This surge occurred as Bitcoin moved toward a $76,000 local high and spurred altcoins higher.
The surge in activity when DOGE prices approached the $0.104 local highs reflected a tendency to take profits and exit the market. The limited upside and repeated tests of the $0.09 local support zone were a worry for bulls.
The 3-month mean coin age has been falling since January, showing that short-term holders were selling the memecoin. Additionally, the 3-month MVRV was near the 8% drawdown mark that has sparked sell-offs in recent months.
On the other hand, the 1-year mean coin age has been rising since February. This alluded to accumulation from long-term holders after the selling from October to February.
It remains to be seen if this accumulation is enough for a rally beyond the $0.104 local highs. Short-term holders will likely sell aggressively into any such bounce, and holders need to be cautious of expecting too much from any potential relief rally.
