The memecoin phenomenon didn’t prove so effective in the cryptocurrency market’s rally last month, as the top cryptocurrency’s gains in this category were barely outperformed by bitcoin. monthly bitcoin gains

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It stood at 44.5%, while Dogecoin are the two largest meme based currencies

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And Shiba Inu

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, 27% and 40.7%, respectively.

Top meme coins by total market cap. Source: CoinMarketCap
Doji needs a catalyst to move the market
Dogecoin is losing popularity as its most prominent backer, Elon Musk, is said to be developing a standalone Twitter currency rather than merging his favorite cryptocurrency with the social media platform.

For the most part of 2022, DOGE/USD has performed poorly except when Elon Musk took over Twitter. The acquisition raised hopes in the Dogecoin community about increased use of the cryptocurrency.

However, without any concrete announcements or reports from Twitter hinting at the use of Dogecoin, the 100% price hike since October was reversed in the following two months. Google search volume for the token has also decreased since the first quarter of 2022.

NVT ratio for Dogecoin. Source: Mineral Scales

Google Trends result for “Dogecoin” and “Shiba Inu” Source: Google Trends
Another factor that affected DOGE’s price last year was the launch of Dogechain. The EVM-compatible blockchain uses DOGE as a gas payment token. However, Dogechain failed to gain user traction, and became a primary place for “shitcoin” trading. Currently, less than 1% of DOGE is delivered on Dogechain.

Finally, the on-chain data for Dogecoin indicates that the price may be overvalued. The network value to transaction value (NVT) ratio measure is the equivalent price-earning ratio of the cryptocurrency markets. The metric measures the ratio of a token’s market capitalization against its transaction volume. Higher transaction volume compared to market cap corresponds to lower NVT readings.

Coinmetrics’ historical NVT chart for Dogecoin indicates that the token could be overvalued. Over the past eight years, the NFT percentage has fluctuated between 10 and 100, with a few outliers during bull markets. Dogecoin’s NVT metric has not exploited the bottom of its long-term range since mid-2021, exposing it to more downside risks.