On-Chain Data Screams “Buy” as Dogecoin (DOGE) Active Addresses Spike

Dogecoin (DOGE) has been one of the best-performing tokens in the top 10 in the past seven days with a 6.5% gain.

However, the world’s most valuable meme coin seems to have hit a sell wall at $0.12 that could push it back to $0.085 in the near term.

Trading volumes remain a bit high at $1 billion, as this figure accounts for more than 6% of the token’s circulating market cap.

Since the year started, Dogecoin has shed 15% of its value compared to a 25% drop in the price of Bitcoin (BTC) and an even more dramatic 33% retreat for Ethereum (ETH).

Active Addresses Rise as DOGE Hits Key Support at $0.085

On-chain data from Santiment shows that network usage spiked, as active addresses jumped from an average of 806,000 the first day of the year to 1.05 million at the time of writing.

Dogecoin Active Addresses (30-day MA) – Source: Santiment

Historically, a steady increase in active addresses has often preceded strong rallies for Dogecoin.

In addition, there was a strong spike in the network’s transaction count during the last 6 days of January, as the price collapsed from $0.12 to $0.10.

The daily chart shows that DOGE jumped off the $0.085 support area. A rally started back in August 2024, right after the token hit this price level.

DOGE/USD Daily Chart – Source: TradingView

That uptrend was catalyzed primarily by positive expectations regarding the election of Donald Trump as President of the United States.

Right now, market conditions are quite different, as President Trump’s nomination of Kevin Warsh for the top seat at the Federal Reserve triggered a massive risk-off move.

Even though DOGE spiked above this key level, the $0.12 area remains a strong supply zone. From a structural standpoint, Dogecoin needs to move above this mark to reverse its downtrend.

The Relative Strength Index (RSI) is currently stepping out of oversold levels, while an early buy signal has popped up in the daily time frame as the oscillator moved above the 14-day moving average.

A retest of the $0.085 support seems highly likely at this point. If buyers’ interest in DOGE wanes once it hits this mark, we could expect a much deeper correction to $0.065.

DOGE Sends First “Buy” Signal in a Month

Heading to the 4-hour chart, we got a buy signal for the first time since January 13, indicating strong buying pressure as DOGE recovered above $0.085.

DOGE/USD 4H Chart – Source: TradingView

A second signal in this lower time frame would indicate that buying pressure is rising. Our signals system identifies high-probability “decisional” candles that feature above-average volumes, a well-defined trend direction, and a specific candle pattern.

The market is getting ready for the release of FOMC minutes on Wednesday, followed by quarterly GDP growth data on Friday. Any of these economic data releases could trigger the next big move for cryptos.

Dogecoin’s price must stay above $0.090 to keep the rally going. Meanwhile, a move above $0.13 could mark the beginning of DOGE’s recovery and could put an end to the latest selling spree.