Dogecoin (DOGE) Extremely Oversold Right Now, Bollinger Bands Signal
The price of Dogecoin (DOGE) has taken crypto investors on a wild ride over the past 24 hours. With a sharp 11% drop during this period, DOGE’s price action led to over $35.1 million in liquidations, making it one of the top cryptocurrencies in this “unfortunate” metric. Notably, long positions bore the brunt of these liquidations.
Despite the recent downturn, a key technical indicator suggests that Dogecoin may currently be oversold. This indicator is the Bollinger Bands, a tool developed by renowned trader John Bollinger to identify potential price reversals.
What Are Bollinger Bands?
Bollinger Bands consist of a 20-day moving average and standard deviations plotted above and below it. Typically, an asset’s price fluctuates within this range. When the price moves outside of the bands, it can signal that the asset is either oversold or overbought.
Dogecoin’s Oversold Status
For Dogecoin, the price has moved below the lower Bollinger Band on all time frames, including the crucial daily chart. As of now, the lower band is positioned at $0.3576 per DOGE, which is 3.5% higher than the current price. This breach indicates that DOGE is in an oversold state.
What’s Next for DOGE?
Does this mean Dogecoin’s price will rebound immediately? While a quick recovery may not be imminent, historical price action suggests that DOGE will likely return to the Bollinger Band range in the near future. However, the exact timing of this recovery remains uncertain.
Conclusion
Dogecoin’s current oversold status, as indicated by Bollinger Bands, presents a potential opportunity for traders to watch for a rebound. While the cryptocurrency market remains volatile, DOGE’s return to its typical price range could offer a glimmer of hope for investors. Keep an eye on market movements and technical indicators for further insights into Dogecoin’s next steps.