Dogecoin, like the rest of the crypto market, has not had an easy go of it in the last week. As the bearish sentiment mounted, cryptocurrencies across the space continued to decline in price, leading to a mostly red week for the industry. However, there could be a turn in the tide for the meme coin whose daily trading volume has witnessed a significant jump in the last day.
Dogecoin Volume Rises By 36%
Despite the price of Dogecoin falling for the better part this week, it seems that bullish sentiment might be getting renewed among investors. According to data from the token tracking website CoinMarketCap, DOGE’s daily trading volume is up 36% between Wednesday and Thursday, reaching $417 million.
This incredible recovery in daily trading volume comes at a time when the market at large is seeing a large decline in volume. Coins like Bitcoin and Ethereum, the two market leaders, have already seen their daily trading volumes decline by 27.51% and 20.96%, respectively, CoinMarketCap data shows.
Given that both Bitcoin and Ethereum volumes are down, it means that Dogecoin’s spike in trading volume is not tied to the broader market. Rather, the increase is coming as a result of rising special interest in the digital asset, which could signal a reversal trend is in the works.
DOGE price topping $0.074 | Source: DOGEUSD on Tradingview.com
Can DOGE Follow The Volume Trend?
Usually, when the daily trading volume of a cryptocurrency is on the rise, it signals more money could be flowing into the asset, which could lead to a rise in price. The same trend was seen in Bitcoin last week when its trading volume jumped 82%.
Over the next couple of days, the price of BTC would continue to rise, eventually hitting $30,000 on Wednesday before getting stopped out. So if this trend is anything to go by, then it is likely that the price of DOGE could reverse and go on to rally over the next few days.
However, it is also important to consider that the jump in daily trading volume could be a result of sell transactions. Since there is no differentiation between buy and sell volume, such a spike could mean bullish or bearish pressure. Although more often than not, it has been bullish.
For now, DOGE’s price is still succumbing to bearish pressure after falling around 4% in the last day. It is performing even worse on the weekly chart with 5.28% losses. However, it is faring better on the monthly chart, rising 7.80% compared to its price at the start of July.