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Three Signs the Dogecoin Rally Has Run Out of Steam

Dogecoin is hanging in there. Having hit an all-time high of $0.418 on April 20, it slumped all the way to $0.207 three days later, before recovering to the modest price level of $0.312 (as of writing).

This partial recovery may give dogecoin fans reason to believe that its rally is biding time, holding steady until the next big surge that will take to yet another record high, and eventually to a price well beyond $1.

However, while dogecoin continues to attract a fair amount of hype and speculation (even from certain corners of the mainstream media), the rally that brought it to $0.418 appears to have run out of steam. Various social and financial indicators suggest that it has lost much of the momentum that pushed it to this current ATH, and that it’s not likely to jump strongly again anytime soon.

Dogecoin lights

Social Data Suggest Dogecoin Rally Is Running Out of New Converts

The first sign of a flagging dogecoin rally: a number of social indicators reveal that the cryptocurrency is attracting a dwindling supply of new investors, who are essential if it’s to rise above $0.418.

As London-based analytics firm skew has tweeted on a number of occasions, new subscriber counts to the Dogecoin subReddit have really dried up in the past week or so. Having hit nearly 70,000 on April 16 (the day it went from about $0.18 to $0.39), it has since been under 10,000 per day for the five days between (and including) April 24 and April 28.

Source: skew

As the graph above indicates, the level of new subscribers to the Dogecoin subReddit has basically returned to levels seen prior to its big mid-April surge. Likewise, we’ve also witnessed a big drop in Google searches for “dogecoin” around the same time:

Source: Google Trends

While the level of searches is slightly above the level it was before April 16, it’s arguably nowhere near high enough to carry the same kind of momentum that provided dogecoin with its current ATH.

A similar picture is provided by data on daily tweets mentioning Dogecoin. On April 29, there were around 23,600 tweets that cited the cryptocurrency, compared to nearly 400,000 on April 16 and a whopping 944,000 on January 29, a day after Elon Musk posted an infamous tweet plugging it. This tweet helped it to reach a then-ATH of $0.0474.

Source: BitInfoCharts

Again, social activity is slightly raised compared to pre-rally. But all three of the above metrics are on their way down, indicating that the rally is losing rather than gaining momentum.

Trading Data Tells the Same Story

The financial data corroborates this account, revealing that trading in dogecoin has quietened down, with lower interest from investors.

For example, active Dogecoin addresses have subsided from nearly 300,000 on April 16 (and on January 29) to 91,000 on April 28. By contrast, there are 1.1 million active Bitcoin addresses and 736,000 active Ethereum addresses.

Active Bitcoin (red), Ethereum (green) and Dogecoin (blue) addresses. Source: Coin Metrics

To put this in some perspective, daily active Dogecoin addresses have rarely been below 60,000 over the past year, so the current figure isn’t elevated significantly above previous counts.

Active Dogecoin addresses over the past year. Source: BitInfoCharts

Related to a decline in addresses is the decline in transactions Dogecoin has witnessed recently. This has gone from nearly 140,000 on April 16 to 37,000 on April 29, again portraying a decline in new traders looking to enter the DOGE market.

Number of Dogecoin transactions per day. Source: Coin Metrics

Similarly, the median transaction size (in DOGE) has also fallen since April 16, from 609.6 DOGE to 258. This indicates a declining demand for dogecoin, with the current well below last year’s average.

Another revealing metric is the 90-day average NVT (network value to transactions) ratio. This compares the market cap of a cryptocurrency to the dollar value of daily transactions on its blockchain, giving an idea of whether the market valuation of a coin is excessive in relation to how much value it’s actually transferring.

As with the price-earnings ratio in traditional finance, high NVT values (i.e. around 90 or above) suggest that a cryptocurrency is currently in a bubble. However, such high-growth companies as Amazon and Tesla remind us that a high PE ratio also reveals that the market expects growth from a stock. The same could be said for the NVT ratio, which in the case of Dogecoin has also declined significantly in recent days.

Source: Coin Metrics

Basically, dogecoin’s market cap has declined relative to the value of its transfers, indicating a decline within the market of the belief that it will grow (strongly). In other words, the market is less bullish for dogecoin right now. In this respect, it’s worth pointing out that bitcoin’s 90-day NVT is higher than dogecoin’s, at 81.8 compared to 66.7.


The final sign that the dogecoin rally is — and will run out of steam — is the lack of wider adoption.

There have been a small handful of companies, such as retailer Newegg and *checks notes* Post Oak Motor Cars, who have recently announced acceptance of DOGE as payment. However, these have been tokenistic announcements at best, designed to attract publicity at a time when Dogecoin is a hot topic.

Source: Twitter

Needless to say, there has been no major news of, say, a major financial institution or corporation entering the dogecoin market, as there has been with bitcoin in recent months. It’s institutional interest which Dogecoin is sorely lacking if it wants to have a longer term, more sustainable rally.

This skepticism aside, it has to be acknowledged that Dogecoin (somewhat inexplicably) continues to be ‘supported’ by celebrities such as Elon Musk and Mark Cuban. It seems that anytime such figures tweet about the cryptocurrency, it experiences at least a modest uptick in activity.

Source: Twitter

While such influence may be waning to a degree (given that it has become so commonplace), there’s also the fact that dogecoin benefits from having a much lower price than bitcoin, ethereum and certain other major cryptocurrencies. This may continue to attract new converts to crypto, who may be put off by the high unit price of BTC and ETH.

Regardless of whether this is true, it seems quite clear that Dogecoin’s current rally is subsiding. Given just how unpredictable and anarchic crypto is, it would obviously be foolish to rule out another surge in the not-too distant future. But for now, another big rally may be unlikely, given the recent drying up of interest.

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CryptoVantage Author Simon Chandler

About the Author

Simon Chandler

Simon Chandler is a journalist based in London. He writes about technology, markets and politics, and has bylines for Forbes, Digital Trends, CCN, Wired, TechCrunch, the Verge, the Sun, the New Internationalist, and TruthOut, among many others. His Twitter handle is @_simonchandler_

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