Dogecoin shows buying opportunity as volatility declines
Dogecoin (CRYPTO:DOGE) is presenting a potential buying opportunity as its market volatility has decreased significantly.
Since dropping to a seven-month low of $0.08 on August 5, DOGE has consolidated within a narrow range between $0.09 and $0.10, indicating reduced price swings and a more stable market.
This period of consolidation is marked by DOGE trading within a horizontal channel, where the upper line at $0.10 serves as resistance and the lower line at $0.09 acts as support.
The reduced volatility is further confirmed by key indicators such as the Average True Range (ATR) and Chaikin Volatility, both of which have been on a downtrend since August 8.
The ATR has decreased by 27%, currently standing at 0.0072, while Chaikin Volatility is below its center line at -43.24.
These indicators suggest that DOGE's market activity has calmed, reducing the likelihood of sudden price movements.
Additionally, on-chain data from Santiment highlights that DOGE’s Market Value to Realized Value (MVRV) ratios, assessed over 30-day and 90-day moving averages, are flashing buy signals.
The 30-day MVRV ratio is at -1.11% and the 90-day MVRV ratio is at -15.32%.
When the MVRV ratio is below zero, it suggests that the asset is undervalued, meaning DOGE’s current market price is lower than what holders initially paid, indicating a potential buying opportunity.
If DOGE can break above the $0.10 resistance level with increased buying pressure, its price could climb to $0.11.
However, if traders overlook these signals and market activity remains low, there is a risk that DOGE’s value could decline back to $0.08.
Dogecoin's current price stability and undervalued status make it a coin to watch for potential gains as volatility fades.
At the time of reporting, Dogecoin is priced at $0.104.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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