02 JUN 2021 (WED)- Dogecoin (DOGE) Daily Risk Report


Investment Disclaimer:

  • I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.
  • Past performance presented here is not an indicator of future performance.
  • This post expresses my own opinion about the cryptocurrency mentioned herein and is not an offer to buy or sell, or a solicitation of any offer to buy or sell the cryptocurrency mentioned in this post. 

1. Top 3 Good News for DOGE HODLERS !!!

2. How Dogecoin Performs Relative to Other Cryptos ?

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As of 02 Jun 2021, Dogecoin has made a cumulative return of 17896.27% since Jan 2020 and 6378.7%  since Jan 2021. It is currently the  greatest performing crypto asset since Jan 2021 as compared to the other cryptocurrencies presented above.

3. Technical Analysis on Dogecoin

3.1. Volume Weighted Average Price (VWAP)

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VWAP is a technical indicator used by a trader to gauge the overall trend of an asset price movement. VWAP line (orange line) represents the volume-weighted average price (average price here is defined as the average of high, low and close prices) while close price line (blue line) represents the price when DOGE is closed at the end of every single day. 

Whenever blue line (close price) is above orange line (VWAP), it indicates that the asset is gaining momentum and being traded higher than its average price level. This would represent a 'buy' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'sell' opportunity, anticipating that the price of DOGE (blue line) to fall to its average level (orange line).

Whenever blue line (close price) is below orange line (VWAP), it indicates that the asset is losing momentum and being traded lower than its average price level. This would represent a 'sell' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'buy' opportunity, anticipating that the price of DOGE (blue line) to rise to its average level (orange line).

As of 02 Jun 2021, VWAP is suggesting that DOGE is trading below its average volume-weighted price range of USD 0.39 to USD 0.42 per DOGE.

3.2. Moving Average Convergence Divergence (MACD)
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MACD is often used by trader as a momentum indicator. There are 2 lines that form the above charts, namely MACD (12, 26) lines and Signal(9) line, while the histogram is calculated by subtracting Signal (9) from MACD (12,26). Histogram would fall to the negative territory whenever MACD (12, 26) is trending at a lower level than Signal (9) and rise to the positive territory whenever MACD (12,26) is trending at a higher level than Signal (9).

MACD (12, 26) is computed by subtracting the 26-day exponential moving average (EMA) of DOGE closing price from its 12-day EMA. 
Signal (9) on the other hand is calculated as the 9-day EMA of MACD (12,26). 

As MACD (12, 26) goes higher away from Signal (9), it signifies that DOGE is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that DOGE is losing momentum. 

As of 02 Jun 2021, MACD is suggesting that DOGE is regaining momentum.

3.3. Bollinger Band

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Bollinger band is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. Its chart made up of 4 lines, namely:

- SMA (20) (blue line), which is the 20-day simple moving average price of DOGE
- Upper Band (orange line), which is computed by adding 2 standard deviations of DOGE on SMA (20)
- Lower Band (red line) , which is computed by subtracting 2 standard deviations of DOGE from SMA (20)
- Close (green line), which is the daily closing price of DOGE

Whenever close line (green) touches the lower band (red), it indicates that DOGE is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever close line (green) touches the upper band (orange), it indicates that DOGE is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 02 Jun 2021, Bollinger Band is suggesting that DOGE is neither oversold nor overbought (i.e. trading at its fair value).

3.4. Relative Strength Index (RSI)

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Just like Bollinger Band, Relative Strength Index is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. There are 2 psychological levels, i.e. 30 and 70 in RSI. Whenever the RSI reaches 30, it indicates that DOGE is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever RSI reaches 70, it indicates that DOGE is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 02 Jun 2021, RSI is suggesting that DOGE is overbought (i.e. overvalued) at 14-day performance window.

Based on the technical analysis presented above, quantdoge holds a neutral stance on the short-term price action of DOGE, but I could be wrong, hence please make your careful due diligence before making any financial decision. 

4. Dogecoin Risk Profile

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Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Dogecoin defined above, DOGE seems to trade at a very much higher risk level on 02 Jun 2021 as compared to 10 days before on 23 May 2021, with its biggest pullback being seen at - 36.74% on a single day during the last 100 days. However, I could be wrong, hence please make your careful due diligence before making any financial decision.

5. Price Simulation for Dogecoin

How did quantdoge simulation perform vs the actual DOGE price movement over the last week ?

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Over the last 7 days, DOGE has been trading in the median price range of quantdoge simulations, indicating that DOGE was trading at its fair value last week.

6. DOGE Community Analytics

Number of DOGE Followers In The Past 24 Months

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During the past 24 months, Dogecoin followers have grown 1164.62 % from 135,765 to 1,716,911 on Twitter and grown 1393.6 % from 134,462 to 2,008,329 on Reddit.

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Monthly increment of Dogecoin Twitter followers peaked on Jun 2021 and its monthly increment of Reddit followers peaked on Feb 2021.

Number of DOGE Followers In The Last 30 Days

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In the last 30 days alone, Dogecoin followers have grown 59.14 % from 1,078,858 to 1,716,911 on Twitter and grown 23.19 % from 1,630,210 to 2,008,329 on Reddit.

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Daily increment of Dogecoin Twitter followers peaked on 09 May 2021 and its daily increment of Reddit followers peaked on 25 May 2021.

If you like my analysis and articles, please follow me at @quantdoge for daily updates. 

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quantdoge
quantdoge

Data scientist in crypto and blockchain space.


Daily Crypto Risk Report
Daily Crypto Risk Report

This blog was created by quantdoge, a data scientist in the cryptocurrency and blockchain space to publish daily risk reports on different cryptocurrencies. All published reports in this blog were analyzed with in-house algorithmic trading and quantitative risk management technology. ** Investment disclaimer: ** I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.

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