Uptick In DOGE’s On-Chain Activity After Musk Tweets About Its Potential

    • DOGE’s price was up by more than 34% over the past 24 hours.
    • Shortly after Elon’s tweet, whale transactions on the network surged.

    When it comes to DOGE, Elon Musk’s tweets have acted as a perfect buy signal. This is why when Musk made a comment on DOGE’s future potential yesterday, the token’s price rallied. At the time of writing, the memecoin was trading at $0.093, up by more than 34% from its swing lows yesterday.

    Even though Musk’s Twitter deal seems to be on hold at the moment, he was not shy to signal his support for DOGE on the social media platform. Yesterday, Dogecoin’s founder Billy Markus tweeted about how he likes Dogecoin because it is stupid. In a reply to that, Elon tweeted that “DOGE has potential as a currency”. 

    Shortly after the tweet, on-chain activity for the token surged. According to data from Santiment, whale transactions worth more than $100,000 and $1 million rose by 70% in the 12 hours following the tweet. In the chart below, we see a cluster of spikes in whale transactions that happened over the past 24 hours.

    Source: Santiment

    Data from Santiment also revealed that active addresses on the network rose sharply after the tweet. On May 12, there were 72,000 active addresses on the network, up by more than 22% from the day before. While the rise in active addresses can be attributed to massive bottom fishing by crypto investors yesterday, it is also true that Elon’s comment came just at the right moment.

    Source: Santiment

    Even though Musk was successful in sparking a rally in DOGE, another on-chain metric indicates that investors might be dumping their tokens during this uptick. Data from Santiment revealed that DOGE’s age consumed spiked to 349 billion days on May 12, up by more than 600% from the day before. 

    Age Consumed shows the number of tokens changing addresses on a certain date, multiplied by the time since they last moved. A spike of this magnitude in age consumed indicates that a whale might have dumped the coins. 

    Source: Santiment

    On that note, it is important that investors don’t get carried away by these upticks because even though a tweet by Musk can send the token high in the short term, the long-term trajectory of DOGE will be dictated by the broader market sentiment.

    Divyam Rakesh
    Divyam analyses market trends based on on-chain data, social data, fundamental and macro factors. He also focuses on emerging trends in the industry.

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