On-chain data suggests that Dogecoin adoption has accelerated recently as a large number of new addresses appear on the network.
Dogecoin is currently seeing a high number of new daily addresses
In a new job on A “new address” is an address that has participated in some sort of transaction activity for the first time.
Some of the new addresses that appear on the network every day belong to existing users, who may create additional addresses for privacy purposes or simply migrate to another wallet.
The rest of the new addresses, however, are created by new investors entering the market, so the daily total value of new addresses can provide insights into the evolution of adoption of the meme coin.
The chart below shows the trend of this metric for Dogecoin over the past two months:
The value of the metric appears to have seen some overall uptrend in the last few weeks | Source: @ali_charts on X
As seen in the chart above, the daily number of new Dogecoin addresses began increasing last month and has since consistently set new highs as the metric continues on an overall upward trajectory. This suggests that the network has recently received a consistently high influx of new investors.
Adoption is always a constructive sign for any cryptocurrency, as new hands can help build a solid foundation on which future price rises can sustainably grow. It is therefore crucial that the assets continue to appear attractive to new users, something Dogecoin seems to have done well recently.
However, positive price effects resulting from adoption generally only appear in the long run. Rather, depending on the nature of the adoption, it may actually have a negative influence on cryptocurrency in the short term.
This happens when too many new users join the blockchain in a short time, only purchasing the asset due to FOMO. Recently, the on-chain analytics company Feeling also discussed this rapid pace of address creation on the Dogecoin network, noting that Bitcoin (BTC) is also showing a similar trend.
The trend in the addresses of the top assets in the sector | Source: Santiment on X
“While network growth is a good sign in the long term, this rapid pace of new wallets is a FOMO sign to be slightly cautious about,” the analytics firm explained in the post.
From the chart, it is visible that Cardano (ADA) is the only asset among the top cryptocurrencies by market capitalization that is not showing any sort of address growth.
Since the rally seen by Dogecoin during the first third of the month, the asset has become rather stale as its price has continued to move sideways around the $0.093 level for the past two weeks.
DOGE hasn't enjoyed any upwards momentum in recent days | Source: DOGEUSD on TradingView
Featured image by Kanchanara on Unsplash.com, charts from TradingView.com, Santiment.net, IntoTheBlock.com
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