Demand remains high despite losing 30% since the beginning of the year
The two most important on-chain metrics for Dogecoin seem to remain at high levels despite the weak price performance of the coin compared to market-leading cryptocurrencies like Zilliqa or Cardano, per Messari.
What does that high hashrate show?
An increased hashrate for almost any cryptocurrency could be considered a demand that traders and miners express toward the cryptocurrency. A high hashrate and network difficulty are usually considered a bullish signal since it shows that miners are interested in supporting block processing on the network and keeping a steady flow of new coins into the market.
But with a swiftly increasing hashrate, miners should be ready to spend more resources on processing new blocks as the difficulty of the network increases in proportion to the hashrate, unless there are events like Bitcoin halvings.
The main argument that keeps miners and the hashrate provided by them on the network is the price of the mined asset. In the case of Dogecoin, the profitability of mining has been dropping for the last 120 days. The reason behind this is simple: the price performance of the first memecoin.
Dogecoin market performance
Despite the short-term recovery of the market, Doge’s performance on the market was far from being perfect in the last couple of months. Since January, it lost around 30%, even despite the 20% short-term recovery in March.
Compared to altcoins like Cardano, Solana or Zilliqa, Dogecoin’s most recent uptrend cannot be considered a reversal rally as the only major resistance broken by the asset was the 50-day exponential moving average, which already acts as a support for Doge—which unfortunately retraced by 14%.