On-chain data suggests that traders have not been showing FOMO towards Dogecoin despite the latest rally, a sign that could be positive for its continuation.
The total amount of Dogecoin holders has remained stable recently
According to data from on-chain analytics firm Santiment, FOMO, which would normally be associated with the tops, has been absent from the Dogecoin market recently.
The relevance indicator here is the “Total Number of Holders”, which, as its name suggests, monitors the total number of DOGE addresses currently carrying a non-zero balance.
When the value of this metric increases, it can be for several reasons. One of the main ones would naturally be new adoptionas the entry of new investors into the sector would open new addresses and give them balance, thus increasing the value of the indicator.
Other reasons could include existing users reconsolidating their holdings between multiple addresses (usually for a purpose like privacy) or former investors coming back to reinvest in the meme coin.
In general, whenever the metric shows this type of trend, it means that some net adoption of the asset is occurring, which could be a positive sign in the long term.
On the other hand, a decline in the indicator implies that some holders may have decided to exit the cryptocurrency as they have completely cleared their addresses.
Now, here is a graph that shows the trend of the total amount of Dogecoin holders over the last few months:
The value of the metric appears to have been moving sideways for a while now | Source: Santiment on X
As displayed in the chart above, Dogecoin’s ‘total amount of holders’ has been stable for many weeks, implying that adoption of the meme coin has hit the brakes.
Interestingly, this sideways trajectory occurred despite the fact that the DOGE price experienced some volatile action during this period. Generally, events like rallies are attractive to traders, so a notable amount of them tend to jump into the asset during them.
It appears that traders have not been paying attention to DOGE’s recent rally or simply not taking it seriously. Over the past few weeks, the meme coin’s “Total Amount of Holders” has increased by just 0.21%, despite the price rising over 40% in the same window.
Historically, when a large number of traders join the blockchain at the same time during price surges, it is a sign that FOMO around the asset is spreading. Typically, the meme coin price tends to go against the expectations of the majority, so when there is widespread FOMO, a top is likely to occur.
As there has been no such FOMO for Dogecoin recently, it is possible that this is a positive sign for the rally to continue. However, there is also another sign that may not be so constructive.
From the chart, it is visible that the average dollar investment age, a metric that tracks the average age of DOGE investments, has recently plummeted, implying that the experienced hands were on the move. When this signal formed at the beginning of the year, the coin’s price approached the top not long after.
DOGE Price
Dogecoin surpassed the $0.22 level previously, but it appears the asset has seen some retrenchment as it is now back below $0.21.
Looks like the price of the coin has been going up in recent days | Source: DOGEUSD on TradingView
Featured image by Kanchanara on Unsplash.com, Santiment.net, chart from TradingView.com
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