According to analysts, the Doge price is set to face a period of instability and volatility in the short term.
According to analysts from the CoinDesk portal, the Doge cryptocurrency will face strong volatility in its price in a short timeframe. The current calm situation will suffer a shock that can take the currency higher or lower in a significant way.
The experts of the aforementioned portal maintain that this future behavior is suggested by the Bollinger Bandwidth (BBW) indicator, which is used to measure the volatility of an asset through a band of three lines on the chart.
Therefore, the meme coin could become a much more extreme bet in a short time than it already is. That implies that placing money in that crypto could generate profits or losses, in either case, extreme.
Doge Price Prediction
So far this year, the Doge price has behaved strangely, which can be related to the stability of its price. In fact, the coin’s performance is comparatively lower than that of large coins like BTC.
However, the aforementioned portal considers that this calm value situation could be the prelude to volatility. “The indicator illustrates periods of variable volatility relative to price swings and is calculated by dividing the spread between Bollinger bands by the price’s 20-day simple moving average (SMA),” explains the technical analysis.
Meanwhile, the indicator lines are placed above and below the 20-day SMA of the prices. If the broad bands are showing wide, this becomes a sign that the uptrend or downtrend is coming to an end.
On the other hand, if the bandwidth is low, then you are on the verge of a strong move in either direction. The latter seems to be the case with the Doge price, which means that the current calm state is drawing to a close.
Dogecoin Current Status
According to TradingView’s Doge price chart, the bands have been narrowing in recent days. Thus, the bandwidth is pushed towards 0.06, the lowest since 2019.
Taking that state into consideration, Doge’s trend could be one of high volatility soon. Consequently, investors could see a strong trend in the value, either bullish or bearish. For investors, of course, this can translate into a high degree of danger to their funds.
It should be taken into consideration that investors must take the necessary precautions. The first thing to keep in mind is that they must be prepared to lose all the funds invested, that is, have a high risk tolerance. The latter also suggests a high possibility of large returns.
The Doge price lends itself to both, according to this analysis carried out by the CoinDesk portal. It is worth keeping in mind that the digital currency market tends to be treacherous to analysis, and that what can be considered a safe trend at one moment changes radically the next.
Cryptocurrencies are highly volatile assets due to low capitalization and trading volume. That leads to the fact that the price can be very generous or a cruel executioner alternately and from one moment to the next.
By Audy Castaneda
