The price of Dogecoin has been pretty stable over the past few months. Not much rise was seen in the price of this coin. However, such stability in the price of Dogecoin indicates an abnormal rise in price. According to Bollinger Bands, one of the most popular tools/indicators of technical analysis, a major reversal can be seen soon.
The most popular meme token is Dogecoin. It is well known to the crypto community for its unusual rise in price. But this year the price has not seen much change. As seen in Bitcoin and Ethereum prices, the coin share has not been seen in Dogecoin’s price. According to the analysis of the technical indicator Bollinger Bands, such a fragile situation in the price of Dogecoin is actually like the calm before the storm.
This technical indicator called Bollinger Bands predicts the direction in which the price of a stock or cryptocurrency may move by considering 3 conditions. The Bollinger Bands indicator helps to estimate how much a stock or cryptocurrency price has risen, how much it has fallen, and in which direction the price movement may move during that particular period by calculating the simple moving average. However, one thing should never be forgotten here that an indicator will never give you exact results.
If the three lines of the Bollinger Bands (upper, lower and simple moving average) are too far from one another or if the spread is too high with one, then it can be assumed that the market will end a bearish (downward) or bullish (upward) trend. But on the other hand, when the three lines of the Bollinger Bands come very close together, the market is expected to actually overreact. Overreaction does not mean that the market will go up, it can go either up or down. However, it is fairly certain that the price may fall or rise significantly.
Looking at the current price chart of Dogecoin, it can be seen that the three lines of the Bollinger Bands are currently very close. This means, very soon a huge change in price can be seen, it can be in either direction; Upward or downward.
Dogecoin is trading at $0.072 at the time of writing this article. Dogecoin’s value has only increased by 3% so far in 2023. In contrast, the price of Bitcoin and Ethereum increased by 68% and 60% respectively. Currently, Dogecoin’s market capitalization is around $10.22 billion, which is the 8th position in the market.
Note: Our article does not in any way encourage cryptocurrency investment. I write articles only for the purpose of sharing information. If someone gets inspired by our article and invests in Dogecoin, we, CoinTalk, will not be a sharer of his profit, nor will we be a sharer of loss.