Dogecoin Holds Steady as Volatility Drops

Dogecoin Holds Steady as Volatility Drops

Since its sharp decline to a seven-month low of $0.08 on August 5 amid a broader market downturn, Dogecoin (DOGE) has settled into a consolidation phase, trading within a defined range.

This period of reduced volatility indicates a lower likelihood of significant price fluctuations in the near term.

DOGE Consolidates in a Narrow Range

Since August 8, DOGE has been confined to a horizontal channel, where its price moves within a set range. This type of sideways trading occurs when there is a relative equilibrium between buying and selling pressures, preventing the price from making any strong directional moves.

For DOGE, resistance has formed at $0.10, while support is established at $0.09. When an asset’s price remains within a tight range, it typically signifies low volatility, as there are no substantial price swings.

Indicators further support this for DOGE. The Average True Range (ATR), a measure of market volatility, has been declining since the sideways movement began. Currently at 0.0072, DOGE’s ATR has decreased by 27% since August 8, reflecting the reduction in market volatility.

Similarly, DOGE’s Chaikin Volatility, another indicator of price fluctuation, has also decreased. As of the latest data, the indicator sits below its center line at -43.24.

A drop in this indicator suggests that the market is experiencing smaller price movements, pointing to consolidation or reduced market activity.

DOGE Price Forecast: Potential Buy Opportunity Emerges

With DOGE’s volatility on the decline, now might be an opportune time to consider buying the meme coin. According to Santiment, a provider of on-chain data, DOGE’s market value to realized value (MVRV) ratios across various moving averages have recently signaled a buying opportunity.

Specifically, DOGE’s 30-day and 90-day MVRV ratios stand at -1.11% and -15.32% respectively.

The MVRV ratio compares an asset’s current market price to the average purchase price of its circulating tokens. When the MVRV ratio is below zero, it suggests that the asset is undervalued, as its current price is lower than the average cost paid by holders, signaling a potential buying opportunity.

If DOGE manages to break above the $0.10 resistance level with increased buying activity, its price could climb to $0.11. However, if traders do not act on the buy signals and trading volume remains subdued, DOGE’s value might fall back to $0.08.