Dogecoin (DOGE) is at risk of a significant price decline due to its network activity, which has remained flat for a while now. Despite a bullish spike in some other metrics, this on-chain metric remains vital for the foremost meme coin’s growth.

Dogecoin Network Activity On The Low

Data from the market intelligence platform IntoTheBlock shows that Dogecoin’s net network growth is bearish and hasn’t recently experienced any notable increase. Further data from the platform shows that the number of new addresses on the network has dropped by almost 10% in the last seven days.

In an X (formerly Twitter) post, IntoTheBlock provided more insights into the slowdown in Dogecoin’s network activity and how the meme coin has had to rely on existing holders so far. According to the platform, the number of new addresses has slowly decreased, indicating a lack of new investors joining the network.

Thanks to this, the number of transactions on the network has been mixed over the last three months. IntoTheBlock noted a few notable spikes, but they were all shortlived, further highlighting how Dogecoin has recently failed to witness a sustained influx of new participants onto the network.

Given the slowdown in the number of new addresses, it is also possible that these notable spikes in Dogecoin transactions were sparked by existing addresses on the network rather than new holders. This slowdown in new addresses explains why Dogecoin’s price action has been rather unimpressive, with the foremost meme coin being unable to replicate the price gains of other meme coins like Pepe (PEPE).

Meanwhile, IntoTheBlock highlighted Dogecoin’s diamond holders’ role in keeping its price afloat amid the meme coin’s lower transaction volume. These long-term holders, who have an average holding time of over two years and three months, have continued to hold, although people might not be actively using the network.

Data from IntoTheBlock shows that 68.11% of Dogecoin holders are still in the money despite the meme coin’s unimpressive price action. Many of these investors bought DOGE while it was still trading below $0.10.

Plausible Explanations For DOGE’s Slowing Network Growth

A plausible explanation for the slowdown in Dogecoin’s network activity is that new investors do not see much upside for DOGE at its current level. As such, they are tilting towards newer meme coins, which they believe will provide them with more gains. Indeed, Dogecoin hasn’t fared well compared to these newer meme coins.

DOGE has a year-to-date (YTD) gain of just over 11%. Meanwhile, coins like Dogwifhat (WIF) and Pepe (PEPE) have YTD gains of over 1,000% and 500%, respectively. The meme coin market is also getting more saturated, especially with the number of meme coins launching in the Solana ecosystem daily. As such, it is understandable that Dogecoin isn’t enjoying the kind of attention it used to in the past.

At the time of writing, Dogecoin is trading at around $0.099, up almost 2% in the last 24 hours, according to data from CoinMarketCap.