Weekly Onchain Insights: What’s going on with Dogecoin?

The IntoTheBlock newsletter highlights weekly interesting data points about the crypto markets.

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IntoTheBlock

4 min readJul 24, 2020

Every week the IntoTheBlock team publishes a newsletter that summarizes key data insights about the crypto market. Below is a quick summary.

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Bitcoin Weekly Update: $9,518.23 4am EST (07/24/2020)

Next Price Movements

What does In/Out of the Money mean?

For any address with a balance of tokens, ITB identifies the average price (cost) at which those tokens were purchased and compares it current price. If Current Price > Average Cost, address is “In the Money.” If Current Price < Average Cost, address is “Out of the Money.”

Despite an active week in Bitcoin news, Bitcoin’s price has stayed uncharacteristically stagnant.

The In/Out of the Money Around Price (IOMAP) that the largest level of resistance is located between $9,520 and $9,790, where roughly 1.5 million addresses previously bought 1 million BTC at an average price of $9,622.

Looking at the levels of support, 2million addresses had previously purchased a total of 1.23 million BTC around $9,350 and another even bigger with 2.45 million addresses with positions around $9,135m signaling strong support at those levels.

By comparing these levels to those provided by technical analysis, we can verify buyers are expected to create support near the $9,200 range, while sellers will provide resistance around $9,300.

See Bitcoin’s In/Out of the Money Chart

Bitcoin records its second-lowest period of 30-day volatility

What does Volatility mean?

Annualized price volatility using 365 days.

As can be seen in the graph above, it is evident that Bitcoin has been more stable, with its 30-day volatility dipping below 20% (orange line in the graph above) for the second time in its history. This has been a result of Bitcoin hovering around the $9,000 level for approximately 84 days since its price surpassed this mark on April 30.

At the moment of writing, the 30-day volatility is at 18.43%, this period of was only surpassed on March 31 of 2019, when Bitcoin recorded its lowest period of 30-day volatility ever with 16.93.%

See Bitcoin’s 30-day Volatility

Elon Musk, TikTok and their effect on Dogecoin (DOGE)

The crypto market might seem incredibly boring to traders these days with Bitcoin and Ethereum behaving like stablecoins. However, throughout the last month, the crypto space has had an unexpected token grabbing headlines: Dogecoin. The meme-inspired cryptocurrency has found increasing support amongst retail traders. .

A few weeks ago, Dogecoin first went viral after a TikTok challenge encouraging people to buy Dogecoin “stock”.

More recently, Elon Musk, who has previously stated that Dogecoin might be his favorite cryptocurrency, tweeted again last week about the token, so in this edition, we take a closer look at some interesting on-chain of Dogecoin insights following the announcement made by Elon Musk

Exciting price action during the month of July

The Dogecoin TikTok challenge started on July 2, and from the start of the steep upward movement around July 6 to the July 9 peak, Dogecoin’s price doubled, from $0.002477 to $0.00455.

After the TikTok boost began to cool down, Elon Musk tweeted on July 18, pushing the price up again 6%.

Since July 2, the price of the token is up 37.5%.

See the Dogecoin Price Chart

Both of these instances generated mass speculation in the network activity

What does Addresses stats mean?

Every day, ITB reports the number of New Addresses created

Both of these instances generated mass speculation as the number of new Dogecoin addresses surpassed 500,000 within the two weeks between the TikTok challenge and Elon Musk’s tweet.

On July 8, a total of 43.12 thousand new addresses, representing the highest number in 2020.

See the Dogecoin Addresses Stats

This events also increased the number of addresses that went to zero

What does Addresses stats mean?

Every day, ITB reports the number of addresses that had any activity (“Active Addresses) while also indicating ts those that have transferred out all their tokens (“Zero Balance Addresses”).

While the increase in new addresses sparked by these viral events is significant, it is dwarfed by the number of addresses that went to zero.

The number of addresses that transferred out all their Dogecoin reached an all-time high on July 14. This is a clear indication that a large number of holders took advantage of the retail frenzy to sell their Dogecoin at higher levels. To be precise, 9.5% of the 3.05 million addresses with a balance of Dogecoin on July 13 sold their coins following the TikTok challenge.