The cryptocurrency market has gone through a long journey in 2021 as many sub-sectors including decentralized finance (DeFi), nonfungible tokens (NFTs), memecoins and layer-two solutions have witnessed their total value locked and token prices increased to new levels.
One of the success stories of the year was Dogecoin (DOGE), a simple “joke” cryptocurrency that has changed into a favourite of the cryptocurrency sector. However, over the past few months the project has started gaining its momentum with several data points prove that sentiment for the DOGE is turning increasingly bullish. Recent data shows that reaching a low of $0.159 on July 20, the price of DOGE has reached 120% to reach an intraday high of $0.35 on Aug. 16 as its 24-hour trading volume jumped by 63% to $8.6 billion.
The reasons analysts and traders are creating a more bullish outlook for DOGE has an increase in on-chain activity, increasing trading volumes with top exchanges and a rise in attention from some of the big-name influencers. The capability to attract new tokenholders is considered as one of the most crucial factors for long-term viability of a cryptocurrency project as new users support the increase token velocity and the total demand for it. The recent tweet from Philip Gradwell, chief economist at Chainalysis, Dogecoin adoption is at its highest level since the 2017 bull market with new users who have had the token for less than six months with 25% of circulating supply.
“Doge has had an average of 32k on-chain Daily Active users (DAUs) in 2021, and this has moved with the price. There is an R value of 0.7 between the percentage change in DAUs and the percentage change in the doge price in 2021 so far.” Said Gradwell. Another reason for the increase in attention from analysts toward DOGE is the increasing trading volumes on large exchanges such as Coinbase. Third reason could be the bullish sentiment around Dogecoin as said by influencers such as Mark Cuban who is searching for benefits of the Dogecoin as a payment method to his twitter followers. “I don’t shill Doge. I Shill the prods & services of my companies. Where we allow people to pay in ANY crypto, 95% of the sales are in DOGE. Customers CHOOSE to use DOGE. We can argue everything and anything re BTC, but right now DOGE is the people’s way to pay.”