Dogecoin (DOGE) is showing no FOMO, is this a good sign for a rebound?
On-chain data suggests that despite Dogecoin’s recent rally, traders are not exhibiting a “fear of missing out” sentiment towards Dogecoin, a sign that could be beneficial for its continued growth.
The FOMO sentiment typically associated with tops has recently evaporated in the Dogecoin market, according to data from on-chain analytics firm Santiment.
The relevant metric here is “Total Holders,” which, as the name suggests, tracks the total number of DOGE addresses with a current non-zero balance. When the value of this indicator increases, there could be several reasons. One of the main factors is naturally new adoption, as new investors entering the industry will open new addresses and increase their balances, thus increasing the value of the metric.
Other reasons could include existing users re-consolidating their holdings across multiple addresses (often for purposes such as privacy) or old investors coming back to reinvest in memecoins. Generally speaking, whenever indicators show this trend, it means that the asset is experiencing some level of net adoption, which can be a positive sign in the long run. On the other hand, a decline in this indicator means that some holders may have decided to exit the cryptocurrency as they have completely wiped out their addresses.
Dogecoin’s “total number of holders” has been flat for weeks, meaning the meme coin’s adoption has stalled. Interestingly, this sideways trajectory occurred despite the fact that the price of DOGE has experienced some volatile price action during this period. Generally speaking, events like rallies are attractive to traders, so a fair number of traders tend to buy the asset during rallies.
It looks like traders either weren’t paying attention to the recent DOGE rally or they weren’t taking it seriously. Over the past few weeks, the Meme coin’s “total number of holders” has only grown by 0.21%, despite the price increasing by more than 40% in the same time frame.
Historically, when large numbers of traders join the blockchain at once during price spikes, it is a sign that FOMO is spreading around the asset. Typically, memecoin prices tend to go against what most people expect, so a top can happen when there is widespread FOMO.
Since Dogecoin hasn’t seen any such FOMO phenomenon recently, this could be a positive sign for the rally to continue. However, there is another signal brewing, but it may not be as constructive.
As you can see from the chart, the “Average USD Investment Age” metric, which measures the average age of DOGE investments, has dropped significantly recently, meaning that experienced investors have already started to act. When this signal formed earlier this year, the coin’s price reached a top shortly after.
