Dogecoin’s Layer-2 Momentum Builds: Traders Urged to Stay Alert, Analysts Suggest

• The Dogecoin ecosystem is evolving beyond its origins as a meme coin, with the introduction of Layer-2 solutions like the Laïka project.
• This project seeks to enhance Dogecoin capabilities through smart contracts, faster transactions, reduced fees, and interoperability with other blockchains.

The Dogecoin ecosystem is graduating from being just a meme coin as the Dogecoin blockchain gets promised Layer-2 solutions built atop it.

The Laïka project unveiled itself as “the premiere Layer-2 solution constructed directly atop Dogecoin.” Its mission is to revolutionize the Dogecoin ecosystem by introducing smart contract functionalities, accelerating transaction speeds, minimizing fees, and enabling seamless interoperability with other blockchain networks.

In a recent tweet, full-time trader Crypto Scient predicts that if Dogecoin turns bullish and breaks its current trend, it could spark another wave of meme coin mania akin to that witnessed in February.

$DOGE, Once DOGE flips bullish and breaks the trend, we will see another meme coin mania similar to one we had in February.

• Break and flip the trend trigger my long entry with Target around the red line (Key MSS level)
• Break and flip the red line to support signals… pic.twitter.com/yss6iw0OVH

— Scient (@Crypto_Scient) May 15, 2024

However, not every Dogecoin (DOGE) trader is bullish at this point. A widely-tracked cryptocurrency trader and investor known as Posty offers a tempered perspective on the meme coin. While acknowledging its recent volatile behavior as a “cursed coin,” Posty suggests that it’s still prudent to monitor its movements closely.

Dogecoin (DOGE) On-Chain Data

According to IntoTheBlock data, total exchange inflows surged to $41.4 million as of May 14, up from $38.8 million on May 13. Currently, 81% of Dogecoin holders are in profit, with stable transactions exceeding $100,000 at 470 from the previous day.

Meanwhile, large transaction volume expanded by 6.7% to $1.73 billion, and exchange net flows soared by 233.4% to $6.07 million. This ecosystem upgrade bodes well for Dogecoin, amidst growing optimism surrounding the meme coin. Over the last 24 hours, DOGE has risen by 2.3%, surpassing the psychological threshold of $0.1504.

While the retail campaign centered around GameStop has been grabbing headlines in the crypto media, on-chain data reveals that whale investors have been quietly entering the Dogecoin rally.

The Santiment chart below illustrates the cumulative balances held in whale wallets with a minimum balance of 1 million DOGE (~$150,000). This metric offers insights into the real-time buying and selling trends of whale investors.

As of May 1, 2024, these whales collectively held 57.06 billion DOGE. By May 16, the publication date, their holdings surged to 57.9 billion DOGE.

This indicates that crypto whales have accumulated 822 million DOGE since the beginning of May 2024. At current prices, this translates to an additional investment of $130 million, leveraging the bullish momentum from Dogecoin’s recent associations with Tesla and GameStop.

However, earlier on Tuesday, May 14, the Doecoin whales moved a very large quantity to crypto exchange Robinhood, per the Crypto News Flash report.