Probably the most popular meme cryptocurrency in the world, Dogecoin (DOGE), is facing a crash that most will not be able to handle. We are talking about the price performance of DOGE, when Bollinger Bands signal a possibility of a 80% drawdown for the meme coin.
The Bollinger Bands, developed by John Bollinger, consist of three curves - the median and two deviations above and below it. Together they form a range movement within which traders can identify the trend and extremes for the price of the asset. The median itself is represented by a 20-day moving average. When the price hits an upper band, it can signal that the asset is overbought, and when it hits the lower band, the price is in oversold territory.
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The thing with DOGE is that on the weekly time frame, the price has fallen below the median, with the indicator at $0.28735 and the meme coin trading at $0.265. Such conditions make Dogecoin more vulnerable to the lower band, which is currently stretched around the $0.057 zone.
Source: TradingView
If the price of the meme coin closes the week below the median, it may indicate a lack of purchasing power and pull Dogecoin closer to the lower band to test buyers there.
On the other hand
The possibility of Dogecoin reaching the $0.06 zone is not short term, and everything can change within weeks. However, as things stand now, the probability of such a development is higher than the probability of a rise to the upper levels from the recent ones.
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While not set in stone like everything else on the crypto market, the Bollinger Bands indicate weakness for Dogecoin, and therefore, another medium-term decline is the main scenario right now, with an 80% crash to $0.057 serving as the ultimate and most grim outcome for the beloved meme cryptocurrency.
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