- Dogecoin (DOGE) sees a surge in new demand with 28,000 new addresses created in a single day.
- Despite the increased demand, DOGE’s price has seen only a minor appreciation.
- DOGE’s Market Value to Realized Value (MVRV) ratio suggests a potential buying opportunity.
With a surge in new demand and a potential buying signal from its MVRV ratio, is now the time to invest in Dogecoin?
DOGE Sees Spike in New Demand
According to data from IntoTheBlock, the popular memecoin, Dogecoin (DOGE), has seen a significant increase in new demand. On May 2nd, 28,000 new addresses were created for trading DOGE, marking a 102% increase from the monthly low set on April 29th. This surge in new demand has also led to an increase in the daily count of addresses involved in DOGE transactions, with a 27% hike recorded over the past week.
DOGE Price Fails to Match Demand
Typically, an increase in network activity is a precursor to a price rally. However, this has not been the case for DOGE. Despite the sustained demand over the past week, DOGE’s price has seen only a minor appreciation. At the time of writing, DOGE was trading at $0.15, with a weekly price appreciation of just 2%. This minor price rally mirrors the general market decline seen over the past week, which pushed the cryptocurrency market’s capitalization below $2.3 trillion on May 1st.
DOGE’s MVRV Ratio Suggests Buying Opportunity
AMBCrypto’s assessment of DOGE’s Market Value to Realized Value (MVRV) ratio suggests that it may be a good time to invest in the memecoin. The MVRV ratio, which tracks the ratio between the asset’s current market price and the average price of every coin or token acquired for that asset, returned a negative value of -12.83% at press time. This suggests that DOGE is currently undervalued, as its market value is below the average purchase price of all its tokens in circulation. A negative MVRV ratio is often interpreted as a “buy the dip” signal, in anticipation of a price rally.
Conclusion
With a surge in new demand and a potential buying signal from its MVRV ratio, it may be an opportune time to invest in DOGE. However, potential investors should always conduct their own due diligence and consider the inherent risks associated with investing in cryptocurrencies.
