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Dogecoin’s Demand Plummets 18% as Price Declines in Meme Coin Frenzy. Here’s Why

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Dogecoin's Demand Plummets 18% as Price Declines in Meme Coin Frenzy. Here's Why

Dogecoin’s demand has plummeted by 18% over the past seven days, leading to a significant decline in its price. This drop in demand has resulted in the cryptocurrency trading within a narrow range, with a 1% decline in price during the same period.

Impact on Network Activity

The decline in demand has also had a substantial impact on Dogecoin’s network activity. According to IntoTheBlock’s data, Dogecoin transaction addresses has cratered by 18% over the past week. Additionally, new demand for the meme coin has declined, with the number of new addresses created to trade Dogecoin falling by 21% during the same timeframe.

Diverging Meme Coin Performance

Interestingly, this decline in Dogecoin’s demand and price performance stands in stark contrast to the performance of other leading meme assets. CoinMarketCap data shows Shiba Inu, Pepe, DogeWifHat, and Bonk prices rose respectively by 9%, 14%, 35%, and 30% this week.

Trading Volume and Sentiment

Santiment’s data reveals that Dogecoin’s daily trading volume peaked at $3.01 billion on May 24 and has since fallen by a staggering 53%. This decline in trading volume is partly attributable to the negative sentiment that has surrounded Dogecoin. On May 24, Dogecoin’s Weighted Sentiment hit a year-to-date low of -1.56 and is currently still negative at -0.35.

Balanced Market Indicators

When an asset’s price trends within a range, it suggests a balance between buying and selling pressures, with neither the bulls nor the bears able to trigger a clear trend. Dogecoin’s key momentum indicators, such as the Relative Strength Index (RSI) and the Money Flow Index (MFI), confirm this equilibrium. At reporting, Dogecoin’s RSI was 53.52 and MFI was 55.72, indicating balanced buying and selling volume.

Future Outlook

The recent decline in Dogecoin’s demand and trading volume, coupled with the negative market sentiment, has led to its price trading within a narrow range. Investors should watch Dogecoin’s momentum and sentiment to predict price changes, as shifts in market dynamics follow.

Read Also: Dogecoin Holders Poised for Breakthrough: $0.17 in Sight: Here’s Why

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