DOGE could easily reach $0.17, according to technical analysis.
Some fundamental reasons could drive the rise of this cryptocurrency.
The memecoin with the largest capitalization, dogecoin (DOGE), known for paying tribute to a viral internet dog, started the week on the rise. Its price today reached 0.15 dollars (USD), its highest in more than four months, which demonstrates greater strength in its demand.
“This dog wants to run,” comments analyst Mike Fay in a report posted over the weekend about memecoin. Details that DOGE daily active addresses have started to rise, which historically it has preceded an upward trend in its price.
It should be taken into account that, in the world of cryptocurrencies, an address refers to an alphanumeric code of a wallet to send and receive crypto assets. This is considered active on the day when you made a transaction, as CriptoNoticias has reported on other occasions.
“The daily active addresses are important because they show the closest thing we have to the users,” says the analyst. While each person may have more than one address, it works as an indicator of activity in the market.
In early 2021, DOGE active address growth led its price between March and May, as well as occurred between November 2023 and March 2024. “The same thing appears to be happening again, with dogecoin active addresses rising around 20% from the beginning of September,” highlights the analyst.
This comparison can be seen in the following graph. The price of DOGE appears in red and that of the active addresses that have the memecoin in yellow.
With this scenario, he maintains that the question the market should ask itself is: Is there a viable catalyst for a larger sustained move in daily active addresses in dogecoin? In his opinion, The answer comes down to the usability of the Bitcoin network.
“When it comes to cryptocurrencies, I try to look for fundamental reasons to be bullish on a network, coin or token,” says the specialist. As is often the case, he clarifies that the fundamental thesis of DOGE is not so simple, since its value lies in representing a dog meme. He thinks this is “a joke that seems to be getting less and less funny” as new memecoins emerge.
However, “where I think DOGE has fundamental value is in an environment where Bitcoin fees make the network unusable for most holders,” he says. This has been shown to lead to increases in the use of other cheaper and more Proof-of-Work (PoW) networks. Dogecoin is one of themhe exclaims.
“We have generally needed large fee spikes in Bitcoin to get large moves higher in daily active addresses on smaller proof-of-work networks,” the specialist elaborates.
Taking this into account, it is worth noting that the average transaction fee on the bitcoin (BTC) network has risen slightly since the beginning of October, as shown in the following graph. “I’m not going to try to predict that this will be the time when the bitcoin fee market grows sustainably, but it is possible,” warns Fay.
In line with bitcoin, the cost per DOGE transaction has also increased this month, as seen below. Meanwhile, it maintains higher levels than last year, which is positive.
“To be bullish on the Dogecoin network overall, DOGE holders should theoretically want active addresses and fees to increase in tandem,” Fay says. Therefore, he suggests continuing to look at these metrics together. Although, in his opinion, this is not the only relevant aspect.
It is worth clarifying that bitcoin users can use the Lightning network. They do not need to use altcoins to make fast and cheap transactions.
$0.17 could be a next mark for DOGE
The specialist highlights that, with regard to the technical analysis of the price chart in dollars (USD), your evaluation is somewhat optimistic for DOGE. The memecoin has surpassed the bearish resistance trend it has experienced since March, when it recorded its highest of the year. In addition, it began trading above the 200-day moving average. This can be seen in the following graph.
However, it shows a much lower performance than bitcoin, which set a new price record seven months ago. DOGE is trading 80% below its all-time high in dollars recorded in 2021, despite registering a 60% increase so far in 2024.
Although, the positive thing is that it broke the downward trend of its price measured in bitcoin (BTC), the analyst indicates through the next graph. Currently, it takes around 200 sats (the smallest unit of bitcoin) to buy 1 DOGE.
With this outlook, “I wouldn’t be surprised if we see a 25% increase in the DOGE/BTC ratio,” concludes Fay. That would take DOGE from 200 to 250 sats, which would mean a rise in the memecoin to US 0.17.
“I currently do not have an active position in DOGE, but it is not something I rule out,” reveals the specialist. He maintains that, in the event of a pullback to the 50-day MA, he will analyze whether to buy holdings in memecoin, despite having been bearish in the past. “Dogecoin has survived naysayers like me,” he concludes with some enthusiasm.
