The leading memecoin Dogecoin (DOGE) has recorded increased activity recently, as long-dormant coins begin to move again. This phenomenon follows a 19% drop in DOGE's price from its three-year peak of $0.48 on December 6.
Experts believe this could be a positive sign for the market, as previously "frozen" DOGE is being brought back into circulation, boosting network activity and laying the groundwork for a potential recovery.
Sleeping DOGE moves
An important on-chain metric that is attracting attention is the Mean Dollar Invested Age (MDIA) of Dogecoin – which has been continuously declining in recent weeks. MDIA measures the average age of all coins in the network based on purchase price, reflecting the time they have been held in wallets.
When MDIA increases, it indicates that coins are being held longer, meaning network activity decreases, often signaling that the market is in a consolidation phase. Conversely, when MDIA decreases, it indicates that "sleeping" coins are returning to circulation, reflecting an increase in network activity and often suggesting a potential bullish trend.
According to data from Santiment, the MDIA of Dogecoin has dropped to 370 days, indicating that coins that had been held for a long time are now "younger" by 31% in just the past eight weeks as they continue to change hands.
When MDIA is trending down as it is now, coins that have not been active for a long time—usually held by long-term investors or major stakeholders—begin to circulate again. This increases network activity, which in turn has a positive impact on price.
"This is an important indicator in the lifecycle of any coin, helping to confirm that the price increase is likely to continue. Similarly, the price increase cycles of 2017 and 2021 only truly ended when the average age of the asset began to rise again," a data provider noted in a post on X.
Additionally, the positive funding rate of DOGE on exchanges reinforces the bullish outlook. At the time of writing, the funding rate of DOGE is at 0.003%.
The funding rate is a periodic fee exchanged between perpetual futures traders to keep the contract price aligned with the underlying asset price. A positive funding rate indicates that long traders (betting on price increases) are paying fees to shorts, reflecting optimistic sentiment and potential upward pressure in the future.
DOGE price prediction: 3-year high within reach
On the daily chart, DOGE trades above the Super Trend indicator, providing dynamic support at $0.34. This indicator measures the direction and overall strength of the price trend. It appears as a line on the chart, changing color based on the current trend: green indicates an uptrend, while red indicates a downtrend.
If this bullish trend continues, DOGE could recover to the three-year high of $0.48.
Conversely, DOGE's price could drop to the support level indicated by the Super Trend at $0.34. If the bulls cannot maintain this support level, $0.31 will be the next level.
