Dogecoin: Can this new development help trigger a rally in DOGE price?

Key takeaways:

• Dogecoin hashrate touches new all-time-high.
• DOGE price has been stuck within a range for nearly five months.
• Several breakout attempts have been foiled and Dogecoin price is nearing a breakdown.

The world’s largest memecoin by market capitalisation, Dogecoin has had a very poor run ever since the beginning of the year. Of course that is naturally due to the overarching bear run the market has been suffering from in the same timeframe. But Dogecoin is back in the news thanks to its hashrate touching its all-time-high levels once again.

This spike in hashrate has been largely due to the rife speculations about DOGE crypto integration into the social media platform, Twitter which Elon Musk is slated to acquire very soon. The crypto community, especially those in the Dogecoin’s are of the opinion that that Musk will take an action to implement the integration of DOGE, the native crypto token of the memecoin on Twitter. Now this seems believable because of the fact that Tesla founder Elon has been a staunch support of the particular memecoin and already accepts it as a mode of payment at some of his companies like Tesla and the Boring Company. He has also always been very vocal about his support for Dogecoin.

I will keep supporting Dogecoin

— Elon Musk (@elonmusk) June 19, 2022

So with that in mind, let’s take a look at Dogecoin’s technicals on the charts.

Dogecoin technical overview

DOGE/USD | Source: Tradingview

As is evident from the chart above, DOGE price has been stuck within a very narrow range (marked in grey) for a very long time now, almost five months to be precise. Dogecoin price had attempted a breakout multiple times before but has been unsuccessful every single time. Back in the middle of August, in line with the broader market recovery in sentiment – DOGE had attempted a good jump but failed to hold on to it convincingly, thus ending up falling back into the narrow consolidation range yet again.

Along with that, DOGE price is trading below both the 50 and the 200 day moving averages, which signify the overall dominance of the bears in the market as of now. The Relative Strength Index is in a relatively stable position but it need a major trigger to do anything useful on the upside. So for the moment, Dogecoin price prediction is to remain on the weaker side, from a technical point of view.

Additional Read: Top Altcoins 2022

Dogecoin hashrate touches near all-time-high!

Dogecoin Hashrate | Source: coinmetrics.io

As you can see from the chart above, Dogecoin’s hashrate did create a new all-time-high very recently. It has been on the news and it ties in well with the overall speculation and excitement around the OG memecoin which also happens to be the largest memecoin by market capitalisation.

So what is hashrate? Hashrate is essentially a representation of the total computational power being used by miners to process transactions in a proof-of-work (PoW) consensus mechanism based blockchain network. It is also a good indicator of a network’s security as a higher hashrate signifies that there are more number of miners verifying transactions on the blockchain. Hence, this rise in hashrate for Dogecoin can be considered to be a very positive sign.

But there’s a caveat.

Active Addresses Count seeing a decline

Active Addresses Count | Source: coinmetrics.io

While a rising hashrate does look good, there’s another on-chain metric that doesn’t look too well too. Take a look at the chart above – the 30-day moving average for active addresses count for Dogecoin has been on a strong decline. Such a decline can be considered to be natural in a bear market such ash this where the overall crypto market capitalisation has lost over 65% of its value in the past ten odd months.

So while this may be along expected lines, a recovery on this metric would prove to only solidify Dogecoin’s future prospects to emerge as a truly decentralised payments network.

Additional read: Dogecoin Price Prediction

Conclusion

In conclusion, it seems like there is a large number of people in the crypto community, especially from the mining space who are looking at Dogecoin as a viable opportunity for the future. This by itself is a good sign, however, there is still some more progress that is needed in Dogecoin’s fundamentals to ensure strong long term price appreciation. Thus, investors should keep an eye out for this coin, if and when market recovery happens in the future.

Prices as on 19 October, 2022.

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