Dogecoin’s Active Addresses Soar 400%, but Weak Demand Keeps Price Down

Dogecoin's active addresses surged 400% to nearly 395,000, yet its price has steadily declined since mid-December. Despite network activity spikes in January and March, these rallies were short-lived, hampered by significant selling pressure. This heightened activity, unfortunately, hasn't translated into price recovery, with weak demand keeping Dogecoin in a consistent downtrend.

Increased On-Chain Activity Amidst Price Decline

Analyst Ali Martinez reported a 400% increase in Dogecoin's active addresses, reaching approximately 395,000. However, the price has remained bearish since mid-December. While January and March saw price increases coinciding with higher network activity, these gains proved unsustainable.

Source: Ali Martinez

Martinez noted that Dogecoin has consistently formed lower highs and lower lows, a clear indication of bearish market sentiment. Brief price spikes occurred in mid-January and late January, but substantial selling pressure quickly reversed these gains. By March, Dogecoin traded around $0.171, highlighting the lack of significant buying pressure.

Despite the substantial increase in network engagement, Martinez emphasizes that demand remains insufficient to support a price recovery. Simply increasing participation isn't enough to trigger an uptrend; sustained buying pressure is crucial.

Market Uncertainty and Future Outlook

The disconnect between Dogecoin's network activity and price action is striking. Increased participation hasn't resulted in a meaningful price reversal. Daily active addresses remained relatively stable, with notable spikes in early January and March – indicating temporary interest but lacking the momentum for a sustained breakout.

By March, the downward price trend persisted despite the heightened on-chain activity. Martinez concludes that Dogecoin remains in a bearish phase, with no clear signs of imminent recovery. While network participation has grown, market conditions remain uncertain.

Dogecoin's future price trajectory hinges on whether buying pressure strengthens sufficiently to trigger a breakout. Martinez's analysis suggests that traders should closely monitor network activity and key support levels.