Dogecoin’s Rising Transaction Volumes Hint at Bullish Momentum

Join us on :

The last day has witnessed a noticeable surge in Dogecoin’s on-chain activity, with crucial metrics indicating increased interest and movement. Specifically, significant changes in the volume of large transactions and the Network Value to Transaction (NVT) ratio may signal an impending shift in the DOGE market dynamics.

_{DOGE/USDT Chart Source: TradingView}

The NVT ratio, which assesses market capitalization relative to transaction volume, has dropped by approximately 14% over the past day. This decrease suggests high transaction volumes relative to market capitalization, historically pointing to an asset that might be undervalued.

This sharp decline could indicate rising investor interest and confidence in Dogecoin’s value and utility. Long-term trends of the NVT ratio have shown considerable variation, with peaks indicating possible market bubbles and troughs suggesting undervaluation.

Increased Transaction Volumes Reflect Growing Interest

The downturn in the NVT ratio implies a rise in transaction volumes, reflecting growing interest in Dogecoin. Alongside the NVT ratio, the number of large transactions — those exceeding $100,000 — has also increased. In the past day, Dogecoin recorded 883 large transactions, totaling 9.41 billion DOGE. This marks the highest volume in the last week, hinting at significant market movements. Large transactions often indicate institutional interest or major trades by whales, which can impact market prices.

Current Trading Patterns And Potential Bullish Reversal

Presently, Dogecoin is trading around $0.129, showing consolidation following a recent decline. The asset’s movement has followed a descending triangle pattern, which typically precedes a bearish breakout. However, the rise in on-chain activity might reverse this trend if the positive sentiment persists.

Potential support levels near $0.126 and $0.128 are hinted at by the convergence of the 50-day EMA and the 200-day EMA. If Dogecoin can maintain trading volumes and break above the descending triangle, it may experience a bullish spike and target the $0.14-$0.15 range.