Dogecoin’s 280K new addresses – Traders, is this a buy signal for you?

Dogecoin's Renewed Demand and Market Sentiment

Surge in New Demand

According to IntoTheBlock, Dogecoin (DOGE) has witnessed a significant spike in new demand. On May 2nd, 28,000 new addresses were created for DOGE trading, marking a 102% increase from its monthly low on April 29th.

Increased Transaction Activity

As new demand surged, the daily count of addresses involved in DOGE transactions also increased. Santiment data reveals a 27% jump in daily active addresses over the past week.

Market Response

Typically, increased network activity precedes a price rally. However, in the case of DOGE, the sustained demand failed to trigger a significant price increase. At the time of writing, DOGE traded at $0.15, with a modest 2% price appreciation over the week.

Bullish Sentiment

Despite the lack of a price surge, DOGE's weighted sentiment, according to Santiment, is trending towards positive territory. This metric measures the overall market sentiment towards a cryptocurrency. A value above zero indicates positive sentiment, while a value below zero indicates bearishness. At press time, DOGE's weighted sentiment was -0.348, but is poised to rise with increased trading activity and short-term gains.

MVRV Ratio Signals Buying Opportunity

AMBCrypto's analysis of DOGE's Market Value to Realized Value (MVRV) ratio suggests a potential buying opportunity. The 30-day moving average of the MVRV ratio is currently at -12.83%, indicating that DOGE is undervalued relative to its average purchase price.

Conclusion

While DOGE's price has not yet responded to the increased demand and bullish sentiment, the MVRV ratio suggests that a buy signal may be approaching. Traders may consider this information when making investment decisions.