- Dogecoin transacting addresses have seen an 18% drop over the past week.
- The DOGE price comes under selling pressure amid an overall decrease in trading volumes.
- Analyst Ali Martinez highlights a crucial resistance zone for DOGE between $0.166 and $0.171.
Discover the latest developments in Dogecoin’s market performance, including a significant drop in transacting addresses and key resistance levels to watch.
Dogecoin Faces Selling Pressure Amid Declining Trading Volumes
While other meme coins like PEPE Coin and Dogfiwhat have delivered substantial gains recently, Dogecoin (DOGE) has underperformed. Over the past 24 hours, the DOGE price has dropped by another 4%, falling below $0.16. This decline comes amid a broader slump in the meme coin sector.
What’s Behind the Dogecoin Underperformance?
Market analyst Ali Martinez has been closely monitoring Dogecoin’s price movements. He highlights a critical resistance zone for DOGE between $0.166 and $0.171. If DOGE bulls can break through this level, the meme coin could potentially double in value, targeting the next resistance around $0.322.
On the other hand, while PEPE coin and WIF have been rallying, the demand for Dogecoin (DOGE) has dropped in the last week. According to data from IntoTheBlock, the daily number of addresses completing transactions involving DOGE has plummeted by 18% over the past seven days. Additionally, new demand for the meme coin has also decreased, with the number of new addresses created to trade DOGE dropping by 21% during the same period.
A decline in an asset’s daily active addresses and new addresses suggests a decrease in overall trading volume. According to Santiment’s data, DOGE’s daily trading volume peaked at $3.01 billion on May 24 and has since dropped by 53%.
Trade Buys 2 Million DOGE Call Options
On Wednesday, May 29, a cryptocurrency trader bought 2 million Dogecoin (DOGE) call options with a strike price of $0.22. These call options expire the next month on June 14, meaning that the popular meme coin will have to surge another 31% from the current levels in order to be profitable.
The trade follows a bullish day in the meme coin sector, spurred by a sudden increase in Gamestop’s (GME) share price. Dogecoin reached a local high of $0.22 in March 2024 but has not exceeded that level since then. Bernd Sischka, chief commercial officer at derivatives exchange PowerTrade, said:
“I think altcoins have been lagging the recent run-up in Ethereum, and most traders look at what ETH is doing and imply potential moves for altcoins. The ETF approval drove the ETH rally, but I think with DOGE the wild card is that Elon Musk adds it to Twitter as some sort of payment currency.”
Conclusion
Dogecoin’s recent underperformance highlights the volatility and speculative nature of meme coins. While key resistance levels and significant trades indicate potential for future gains, the decline in active and new addresses suggests a cautious outlook. Investors should closely monitor market trends and key developments, such as potential integrations with major platforms like Twitter, to gauge the future trajectory of DOGE.
