Dogecoin Bollinger Bands Squeezes Tighter Than It Was Before 2021 Rally, What This Means
02 November 2024 - 12:00AM
NEWSBTC
Dogecoin has had quite an eventful few days in terms of price
action, trading volume, trading activity, and interest among
investors. Dogecoin led the entire market in inflows, outperforming
even Bitcoin in the past week. This momentum has introduced a
compelling shift in Dogecoin’s technical outlook, particularly with
the Bollinger Bands on the DOGE/BTC chart. This interesting outlook
was highlighted by crypto analyst Tony Severino, who pointed out
that the Bollinger Bands have tightened to a degree not seen in
years. In fact, Severino notes that the bands are now tighter than
they were before Dogecoin’s rally in 2021. Dogecoin Bollinger
Bands Squeeze To Tightest Level Bollinger Bands are widely used
technical indicators that mark price volatility boundaries. When
the bands narrow, it generally signals low volatility. On the other
hand, widening bands indicate high volatility. A squeeze, where the
bands move closer together, suggests that the asset is trading
within a tight range. In the case of Dogecoin, Severino’s
observation notes that the DOGE/BTC Bollinger Bands are now closer
than they’ve ever been on the monthly timeframe. Related Reading:
Ethereum Price Completes 12 Weeks Of Bottom Formation, Analyst Says
Don’t Aim Lower Than $4,900 ATH The last the Bollinger bands were
at such a squeeze was just before the 2021 rally, which saw the
meme coin surge exponentially during the meme coin craze. Going by
the history of the Dogecoin-Bitcoin pair, if the outcome plays out
like its previous price action, Dogecoin could be on the cusp of a
strong rally in the coming months that could even lead to more
returns than the 2024 rally. DOGE Breakout From Three-Year
Channel As noted earlier, Dogecoin’s rally over the past few days
has been impressive. Particularly, Dogecoin went on a 72% rally to
peak at $0.176, its highest point in over six months. This upward
momentum allowed Dogecoin to break out of a three-year-long channel
pattern on the price chart defined by a downward-sloping upper
trendline dating back to the 2021 high. This breakout is
significant, as it marks Dogecoin’s move beyond a key resistance
level that had contained its growth since the 2021 peak.
Related Reading: Bitcoin Price To New ATH Soon? Analyst Who Called
$72,000 Surge Reveals What Needs To Happen The likelihood of a
Dogecoin rally in the upcoming months has increased massively due
to this breakout, although there remains a possibility of a retest.
According to a crypto analyst on social media platform X, $2 is a
potential peak target if the momentum holds. However, it is
important to note that several resistance levels lie between the
current price and this ambitious target. Two examples of notable
resistance levels are the 2024 high of $0.22 and the all-time high
of $0.7316. At the time of writing, the Dogecoin price is trading
at $0.1585, which means it has reversed by about 10% from $0.176 to
retest the channel breakout. Featured image created with
Dall.E, chart from Tradingview.com
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