Dogecoin shows signs of volatility spike on chart | coindesk JAPAN | Coindesk Japan

Dogecoin (DOGE), a notoriously volatile memecoin, is up just 3% this year. While Bitcoin (BTC) and Ethereum (ETH), the representative crypto assets (virtual currencies), have risen by 68% and 60%, Dogecoin’s low volatility stands out, and a technical indicator predicts that volatility will increase in the future. It shows the potential for soaring.

Bollinger Band Width Decreased

Bollinger Band Width (BBW), a technical indicator derived from the Bollinger Bands, has remained low, suggesting that a big move is on the horizon.

The width of the Bollinger Bands is calculated by dividing the difference between the two Bollinger Bands (upper and lower bands) by the 20-day simple moving average (SMA) of the price. It can be grasped as a percentage of the price.

During periods of increased volatility, the Bollinger Bands width increases as the distance between the two Bollinger Bands increases. Conversely, when volatility subsides, the Bollinger Bands width decreases.

A high number of Bollinger Bands usually indicates that a previous bullish or bearish trend is coming to an end. On the other hand, if the Bollinger Bands numbers are very low, the market could move significantly in either direction.

Lowest number since February 2019

Checking the chart on TradingView, Dogecoin’s Bollinger band width on the daily chart has fallen to 0.06, the lowest since February 2019.

TradingView/CoinDesk

Given that the Bollinger Bands tend to expand and contract in width, Dogecoin volatility could soon spike. But the spike in volatility has nothing to do with which direction prices go. It can be both upward and downward.

As of this writing, Dogecoin is trading near $0.073.

｜Translation: coindesk JAPAN
｜Editing: Rinan Hayashi
｜Image: TradingView
｜Original: Dogecoin Chart Pattern Suggests Volatility Explosion Ahead