Dogecoin price has extended its gains on Monday after a successful retest of its support level last week. This upward movement is bolstered by a significant increase in the cryptocurrency’s daily active addresses, reaching its highest point since early April. This metric, which reflects on-chain activity, indicates rising blockchain usage and suggests a potential rally for Dogecoin in the near future.
Technical Analysis: Breaking Resistance
The recent price action for Dogecoin has displayed promising signs for traders. After breaking above a descending trendline—identified by connecting multiple highs since late May—on September 24, DOGE surged over 18% within four days. However, the rally encountered resistance at the daily level of $0.128 on September 29, leading to a retracement of gains.
Despite this setback, Dogecoin found support around the breakout level of $0.102, which was previously identified as a significant trendline. Following this support bounce, DOGE saw a resurgence, rising 6.6% until Sunday. As of Monday, it is trading higher at approximately $0.114, maintaining a bullish sentiment in the market.
On-Chain Metrics Indicate Increased Demand
Supporting the positive outlook for Dogecoin, Santiment’s Daily Active Addresses index has shown a marked increase. This metric is crucial for assessing network demand, as a rise in active addresses indicates heightened interest and usage of the blockchain. In the case of Dogecoin, the number of daily active addresses jumped from 57,848 on September 30 to 81,689 on October 1—the highest level observed since early April. This surge suggests a growing appetite for Dogecoin, which could translate into further price gains.
Caution Ahead: Key Support Levels
While on-chain metrics and technical indicators favor a bullish outlook, traders should remain vigilant. If Dogecoin’s daily candlestick closes below $0.098, it could invalidate the bullish thesis by creating a lower low on the daily chart. Such a development might trigger a decline of approximately 10%, potentially leading to a retest of the September 6 low around $0.088.
Conclusion
As Dogecoin navigates its current price dynamics, the combination of technical analysis and increased on-chain activity offers a cautiously optimistic outlook. Investors will be watching key support levels closely, as the next few trading sessions could be critical for determining the cryptocurrency’s trajectory. With rising demand and active addresses, Dogecoin seems poised for a potential rally, provided it maintains its position above critical support zones.
October 2024, Cryptoniteuae
