Leading meme coin Dogecoin (DOGE) has recently seen increased activity, with long-dormant coins being moved. These coins have begun to change hands following a 19% decline in the coin’s price since it climbed to a three-year high of $0.48 on December 6.
This coin movement is a bullish signal as it indicates that previously dormant Dogecoins are back in circulation, increasing network activity and setting DOGE up for a rebound.
Dormant Dogecoins Change Hands
The on-chain metric in focus here is Dogecoin’s Mean Dollar Invested Age (MDIA), which has trended downward over the past few weeks. This metric measures the average age of all coins in a network weighted by their purchase price, reflecting how long they have remained in wallets.
When the MDIA rises, it means coins are staying in wallets longer, indicating reduced network activity and often signaling market consolidation. On the other hand, a declining MDIA indicates increased network activity as dormant coins re-enter circulation, often signaling bullish momentum.
According to Santiment, DOGE’s MDIA has dropped to 370 days, indicating that long-held coins have become 31% younger over the past eight weeks as they continue to change hands.
When MDIA trends downward in this manner, dormant coins, often held by major stakeholders or long-term investors, come back into play, leading to increased network activity, which positively impacts price.
“This is one of the key indicators throughout the history of each coin’s lifespan that helps validate that a bull market can and should continue. The 2017 and 2021 bull markets similarly did not come to a halt until assets’ mean ages started going “up” (getting older) again,” the on-chain data provider stated in a post on X.
DOGE’s positive funding rate across cryptocurrency exchanges confirms this bullish outlook. The meme coin’s funding rate is 0.003% as of this writing.
The funding rate is a periodic fee exchanged between traders in perpetual futures contracts to keep prices aligned with the underlying asset. A positive funding rate means that long traders (those betting on price increases) are paying shorts, indicating bullish sentiment and potential upward price pressure.
DOGE Price Prediction: 3-Year High Back Within Reach
On a daily chart, DOGE trades above its Super Trend indicator, which offers dynamic support at $0.34. This indicator measures the overall direction and strength of a price trend. It appears as a line on the chart, changing color based on the prevailing trend: green signifies an uptrend, while red indicates a downtrend.
If this bullish trend persists, DOGE may witness a rebound toward its three-year high of $0.48.
Conversely, DOGE’s price could decline toward the support level indicated by its Super Trend indicator at $0.34. If bulls cannot maintain this support, the price may further drop to $0.31.
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