The cryptocurrency market has had a wild ride so far in 2021, as multiple subsectors such as decentralized finance (DeFi), NFTs, meme coins, and layer two solutions have seen their TVL figures and their prices of tokens soared to new highs.
One of the biggest success stories of the year was Dogecoin (DOGE), a simple cryptocurrency of ‘joke’ that has become one of the favorites of the cryptocurrency sector. Interestingly, for the last month, The project has been gaining momentum again and various data points suggest that sentiment for the DOGE token is turning increasingly bullish.
Data of Cointelegraph Markets Pro Y TradingView show that since it touched a minimum of USD 0.159 on July 20, the price of DOGE has recovered 120% to reach an intraday high of $ 0.35 on August 16, with its 24-hour trading volume rising 63% to $ 8.6 billion.
Three reasons why analysts and traders are arguing a more optimistic outlook for DOGE include increases in on-chain activity, growing trading volumes on major exchanges, and increased attention from big-name influencers.
On-chain activity shows higher usage
The ability to attract new token holders is one of the most important factors for the long-term viability of a crypto project because new users help increase token speed and overall demand.
As seen in the following tweet from Philip Gradwell, the chief economist of Chainalysis, Dogecoin adoption is currently at its highest since the 2017 bull market with new users who have had the token for less than 6 months and currently have 25% of the circulating supply.
On-chain, Doge is being adopted by new investors at a level not seen since the late-2017 bull market, with new investors increasing their share of supply from 9% in July 2020 to 25% in August 2021 pic.twitter.com/W782qNhyMW
– Philip Gradwell (@philip_gradwell) August 16, 2021
A follow-up tweet from Gradwell provided a deeper insight into Dogecoin’s on-chain activity, which had an average of 32,000 daily active users (DAU) in 2021.
“Doge has had an average of 32,000 daily active users (DAU) on-chain in 2021, and this has moved with price. There is an R-value of 0.7 between the percentage change in DAU and the percentage change in the Doge price in 2021 so far. “
Volumes on exchanges are increasing
A second reason for the increased attention that analysts are paying to DOGE is the increase in trading volumes on some of the biggest exchanges, including Coinbase.
Just saw the USDDOGE volume on Coinbase the past week and my god
There have been some massive buyers 200m USD a day of Doge in volume on CB alone (DIrect fiat on ramp) starting a week ago
While I’m not trading it to USD1+ I do think it will get there. My goal is .40-.45 pic.twitter.com/VBtdAWtdjk
— Pentoshi Wont DM You (@Pentosh1) August 15, 2021
I just saw the USD / DOGE volume on Coinbase last week and OMG.
There have been some massive $ 200 million buyers in Doge a day in volume only on Coinbase (main fiat entry ramp) as of a week ago.
While I don’t see it at a dollar or more I think it’s going to get there. My goal is $ 0.40 to $ 0.45.
Coinbase is the largest fiat entry ramp in the US and this surge in trader activity could be a sign that retail investors are piling up again in DOGE and possibly other tokens under $ 1. .
Mark Cuban Touts Dogecoin Profits
A third reason for the bullish sentiment surrounding Dogecoin is the recent comment from big name influencers like Mark Cuban, who is once again promoting the benefits of Dogecoin as a means of payment to his legion of Twitter followers.
The point about DOGE that people miss is that DOGE’s imperfections and simplicity are it’s greatest strengths. You can only use it to do 2 things: Spend It or HODL It. Both are easy to understand. And it’s cheap to buy. Which makes it a community anyone can join and enjoy.
— Mark Cuban (@mcuban) August 15, 2021
The point about DOGE that people miss is that DOGE’s imperfections and simplicity are its greatest strengths. You can only use it to do 2 things: Spend it or HODL. Both are easy to understand. And it is cheap to buy. Which makes it a community that anyone can join and enjoy.
Cuban’s focus on Dogecoin drew the ire of some Bitcoin fans who they implored to the Shark Tank star who just “buy a stack of Bitcoin and stop talking about Dogecoin”, a sentiment to which Cuban responded directly, noting that the decision was largely in response to user demand.
Cuban He said:
“I don’t promote Doge. I promote my companies’ products and services. Where we allow people to pay with ANY cryptocurrency, 95% of sales are in DOGE. Customers choose to use DOGE. We can discuss anything and everything about BTC, but right now DOGE is the people’s form of payment. “
The positive change in momentum for Dogecoin was also recorded in the VORTECS ™ data from Cointelegraph Markets Pro, which began to spot a bullish outlook on August 9, ahead of the recent price spike.
The VORTECS ™ score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trade volume, recent price movements and activity in Twitter
As seen in the graphic above, the VORTECS ™ score for DOGE rose to green on August 7 and peaked at 72 on August 9, about 24 hours before its price increased 44% over the next six days.
Rising on-chain activity and daily trading volumes, coupled with the return of DOGE promotion by popular influencers, have prepared Dogecoin to possibly see its second bull market rally in 2021.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Each investment and trade movement involves a risk, you must carry out your own research when making a decision.
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When will Dogecoin hit the moon? On-chain data and trading volumes suggest that soon