Will Dogecoin price experience extreme volatility as it falls below $0.079?

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This news was published on February 5, 2024, Taiwan time
The title is Will Dogecoin price experience extreme volatility as it falls below $0.079?

Recently, Dogecoin once fell below the $0.079 level, allowing the market to take action. Ali Martinez, a well-known cryptocurrency analysis expert, made a statement on the social platform X, predicting that Dogecoin is about to experience violent price fluctuations. Martinez carefully interpreted the four-hour Bollinger Bands chart of Dogecoin and found that the Bollinger Bands have tightened to a rare degree since October last year, which seems to indicate that a storm of Dogecoin price fluctuations is coming.

Bollinger Bands, an old figure in technical analysis, helps traders gauge the potential direction of price fluctuations by calculating the moving average of price and its upper and lower standard deviation ranges. When the Bollinger Bands tighten, it means that market volatility decreases, and conversely, it indicates that big moves are about to happen. This time, the tightening of the Bollinger Bands that Martinez saw undoubtedly gave Dogecoin investors an early warning.

On the other hand, Dogecoin’s open interest data also shows market activity. According to Coinglass, Dogecoin open interest increased by 2.47% to reach $432.21 million. But at the same time, there has been a massive long liquidation of approximately $653,000 in the past 24 hours, which may be the trigger for Dogecoin’s price to drop further.

As for the current market situation of Dogecoin, it is currently in a delicate situation. The last price was $0.07849, with a market capitalization of $11.22 billion, and trading volume climbed in the latest wave, increasing by 28.65% to $200.98 million. Cryptocurrency analyst Crypto Patel also takes a long-term view and believes that Dogecoin has the potential to hit a peak of $3 in this bull market, and specifically pointed out that $0.11 is a key observation point.

In this news, we can analyze the price trend of Dogecoin from the following perspectives:

1. The tightening of Bollinger Bands indicates volatility: The original article mentioned that according to the analysis of the Bollinger Bands chart by analyst Ari Martinez, Dogecoin’s Bollinger Bands have tightened to a rare degree since October last year. Bollinger Band tightening is a signal of reduced market volatility, but it also indicates that there may be a violent price fluctuation in the future. Therefore, when the price of Dogecoin falls below the key support level of $0.079, market uncertainty increases, and the Bollinger Bands prediction means that there may be a wave of extreme volatility.

2. Open interest and long liquidation: As mentioned in the original article, Dogecoin’s open interest increased by 2.47%, but a large number of long liquidations also occurred at the same time. In this case, the growth in open interest reflects that the market’s attention and investment intention for Dogecoin are still high, but the occurrence of long liquidation also shows the market’s reaction to the price decline. This change in market dynamics, especially after a break below the psychological $0.079 level, could lead to more dramatic price swings.

3. The market’s long-term expectations: Although there may be volatility in the short term due to falling below $0.079, analyst Crypto Patel’s long-term view of Dogecoin is quite optimistic, believing that it has the potential to reach a peak of $3. This long-term optimistic expectation may attract more buyers to the market and support a price recovery after Dogecoin experiences short-term fluctuations.

Overall, the market reaction after Dogecoin price fell below $0.079 showed possible violent fluctuations in the short term, but from a long-term perspective, analysts expressed optimistic expectations for it. The tightening of the Bollinger Bands, the growth of open interest and the liquidation of longs all point to a heightened focus on this volatility. Although short-term fluctuations are inevitable, in the long term, Dogecoin still has the opportunity to attract more investors and support its price recovery. Based on the above factors, this channel believes that this is the golden moment for long-term investors to accumulate chips and plan for the future. However, it must be emphasized that these views we share are not professional investment advice. They are only based on our observations and analysis. If you have any questions about our interpretation, we recommend that you refer to the source news link attached in the information column. For further verification, it is crucial for investors to do their own homework. Please remember to never invest in something you do not understand, never invest in a position that you cannot afford to lose, and make investment decisions carefully. . Of course, we will continue to pay close attention to the latest developments of Dogecoin.