Dogecoin hashrate was on the rise over the last week due to the popularity of DRC-20 tokens. However, the network has taken a nosedive in terms of hashrate over the past day with a double-digit drop. So what could be driving this decline?
Investors Find Other Things To Occupy Their Time
Now, when the Ordinals and BRC-20 craze first began, investors flocked to the Bitcoin network which led to a surge in the number of transactions on the network. It wasn’t long until developers were moving this concept to the likes of Dogecoin and Litecoin, both of which operate similarly to the Bitcoin network.
From this, the DRC-20 tokens were born, allowing for the transfer of fungible tokens on the Dogecoin network just like the Ethereum ERC-20 standard. As their popularity grew, so did the number of transactions on the network. This report from NewsBTC shows that there was a 60x spike in the number of DOGE transactions in a 20-day period, thanks to DRC-20 tokens.
As expected, the spike in transactions also led to an increase in the hashrate of the network given the higher workload. According to data from CoinWarz, Dogecoin’s hashrate spiked to over 1 petahash per second (PH/s) on May 17 at the height of the euphoria. But as the hype dies down, the hashrate has returned to its previous levels.
Data from the mining tracker shows that DOGE’s hashrate is down over 34% in the last 24 hours. This coincides with a lull in interest when it comes to DRC-20 tokens. As investors move away onto the next shiny new thing, the hashrate has returned to 470.70 terahash per second (TH/s).
Dogecoin Prices Trends Low
One thing that stood out evenly throughout the DRC-20 hype is the fact that the price of Dogecoin did not positively react. Instead, the meme coin continued on the same path as the rest of the crypto market, not showing any significant movement.
As a result, DOGE is only seeing meager gains of 0.08% on the 24-hour chart. This follows the trend for the last week with a cumulative gain of 1.59% in the 7-day period. Nevertheless, the digital asset is still holding steady as the eighth-largest cryptocurrency in the market.
It is seeing resistance at the $0.075 level, which is currently a hindrance to any rally the coin might attempt. On the flip side, the trading volume of DOGE looks healthy at $163 million at a time when most cryptocurrencies are trending downward.
Taking these factors into consideration, it is unlikely that DOGE will move on its own from this point. The more likely outcome is that the meme coin follows the movement patterns of Bitcoin or a tweet from billionaire Elon Musk could also push the price higher.