Is Dogecoin Making a Comeback? Galaxy's New Report Shows Growing On-Chain Activity, Technical Indicators Turn Bullish Too

Dogecoin (CRYPTO: DOGE), the meme cryptocurrency that started as a joke but has since gained a cult following, may be making a comeback, according to a new report from Galaxy Research. 

What Happened: The report dated December 15 mentions the growing on-chain activity and potential for further gains that the meme cryptocurrency is experiencing.

At the time of writing, Dogecoin is trading at over $13 billion in market capitalization, making it one of the top 10 non-stablecoin cryptocurrencies "worth almost two times as much as Wyndham Hotels & Resorts and almost as much as Nissan."

While its price performance has been underwhelming compared to other ecosystems, the report notes that Dogecoin continues to have a vibrant community. "Dogecoin, which we previously called The Most Honest Sh*tcoin due primarily to its transparent nature and lack of any premine or VC allocation, has languished this year," read the report.

According to the report, DOGE is up around 77% from its bear market lows near $0.053 in June 2022 but is still down 86% from peak bull highs around $0.68. 

The rise of “Doginals” brings a new facet to dog money utility, the report explains, and the upcoming launch of the DOGE-1 satellite stands to send Dogecoin to the moon – literally. The satellite, set to launch on January 12, 2024, is the first commercial lunar payload to be funded by any cryptocurrency and will be paid for entirely with DOGE.

Galaxy Research notes that, historically, Dogecoin has risen shortly after Bitcoin (CRYPTO: BTC) makes all-time highs, and the upcoming launch of the DOGE-1 satellite could lead to increased participation from retail players in the market as Bitcoin enters price discovery. 

See Also: Polygon Labs Pulls The Plug On Open-Source Tool Used For Dogechain Development

Technical Analysis: Meanwhile, on the technical analysis side, Dogecoin’s Relative Strength Index (RSI) in 2023 showed several close or overbought conditions throughout the year, with a level close to the 70 threshold, indicating that the buying momentum may have been overextended.

Technical analysis of the DOGE-USD chart based on three different Simple Moving Averages (SMA) of 50-day SMA, 100-day SMA, and 200-day SMA shows that the price of Dogecoin is currently above all three SMAs, suggesting an upward trend.

It also indicates that the current sharp rise in price has distanced the price well above the SMAs. This can sometimes indicate over-enthusiasm in the market and can precede a pullback or consolidation. However, if volume supports the move, it can also suggest a strong momentum that might continue. Investors and traders might look at this as a confirmation of a strong bullish sentiment in the market for Dogecoin. 

The DOGE On-Balance Volume (OBV) shows a clear upward trend, indicating that the volume is supporting the price trend. Additionally, towards the later part of the chart, the OBV has risen sharply, suggesting a significant amount of volume is backing the recent price increase, indicating strong buying pressure and potentially bullish sentiment among traders.

Photo via Shutterstock

Read Next: Analyst Warns Of Potential ‘Rug Pull’ If Spot Bitcoin ETF Fails To Gain Approval In January 2022

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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