The number of active Dogecoin users is increasing. Will this affect the DOGE price?

The number of daily active users of Dogecoin (DOGE) has increased by 32% in the last 24 hours.

What happened: According to data from IntoTheBlock, the number of daily active addresses (defined as addresses that have made at least one on-chain transaction in the past day) totals 55,444.

This metric is often used to track network activity over time. An increase in daily active addresses typically indicates an increase in blockchain usage, while a decrease indicates lower network demand.

There is often a correlation between the number of daily active addresses and price activity, making it a potential leading indicator of price trends.

The price of Dogecoin has been recovering since Friday after declining for three days in a row. At the time of writing, Dogecoin was up 2.10% in the last 24 hours and was trading at $0.101.

Also read: Massive Dogecoin moves worth $50 million each spotted on Robinhood

Market observers closely monitor the correlation between daily active addresses and price movements. A strong correlation could indicate that active addresses are following the price rather than using the crypto asset.

If the recovery continues, buyers could attempt to push the Dogecoin price above the daily SMA 50 at $0.115. A break above the daily moving average could start a new uptrend for Dogecoin.

Why it is important: The increase in Dogecoin's daily active users is a significant development for the cryptocurrency. The increase in active addresses could potentially lead to an increase in demand for DOGE, which could subsequently affect its price.

The correlation between active addresses and price movements has been observed in the past, and a continuation of this trend could indicate a positive development in the Dogecoin price.

However, it must be noted that although the increase in active users is a positive sign, it is not a guarantee of a price increase.

The cryptocurrency market is highly volatile and is influenced by a variety of factors, so investors should closely monitor the situation and make informed decisions.

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