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 !!!
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Elon Musk-Touted Dogecoin Becomes Available on Blockchain.com
Statistic as of 2021-05-07 10:29 AM EDT: 37 positive votes, 9 negative votes
The Blockchain.com exchange has added support for meme cryptocurrency Dogecoin.
(Extracted from CryptoPanic) -
Mike Novogratz Shares His Take on Dogecoin $80 Billion Rally, Says Elon Musk Is Not the Only Trigger
Statistic as of 2021-05-07 10:29 AM EDT: 26 positive votes, 2 negative votes
Galaxy Digital founder Mike Novogratz ponders on the triggers of the DOGE rally, names reasons aside from Elon Musk’s Shiba-Inu tweets and says crypto is not a bubble.
(Extracted from CryptoPanic) -
Mark Cuban: Dogecoin Will Hit $1 And Become a Stablecoin
Statistic as of 2021-05-07 10:29 AM EDT: 18 positive votes, 1 negative vote
Mark Cuban thinks Dogecoin is headed straight for $1—and will stay there. The reason? It's becoming more of a utility, he argues.
(Extracted from CryptoPanic)
2. Top Bad News for DOGE HODLERS !!!
- Only whales move DOGE: Data suggests major Dogecoin wealth gap
Statistic as of 2021-05-07 10:30 AM EDT: 4 positive votes, 22 negative votes
Relatively few hands are moving a large amount of DOGE.
(Extracted from CryptoPanic)
3. How Dogecoin Performs Relative to Other Cryptos ?
As of 07 May 2021, Dogecoin has made a cumulative return of 27826.13% since Jan 2020 and 9917.96% since Jan 2021. It is currently the greatest performing crypto asset since Jan 2021 as compared to the other cryptocurrencies presented above.
4. Technical Analysis on Dogecoin
4.1. Volume Weighted Average Price (VWAP)
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 07 May 2021, VWAP is suggesting that DOGE is trading at a very high price from its average price range of USD 0.45 to USD 0.50 range.
4.2. Moving Average Convergence Divergence (MACD)
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 07 May 2021, MACD is suggesting that DOGE is gaining a very huge momentum than average.
4.3. Bollinger Band
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 07 May 2021, Bollinger Band is suggesting that DOGE is trading at a very high valuation than its fair value.
4.4. Relative Strength Index (RSI)
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 07 May 2021, RSI is suggesting that DOGE is trading at its fair value range.
Based on the technical analysis presented above, quantdoge thinks that Dogecoin has been gaining a lot of upside momentum in the past days to the extent that it has been overly bought, and it has a fair chance to undergo short-term price correction which sees its price being brought down to a lower level, but I could be wrong, hence please make your careful due diligence before making any financial decision.
5. Dogecoin Risk Profile
Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Dogecoin defined above, DOGE seems to trade at a higher risk level on 07 May 2021 as compared to 10 days before on 27 Apr 2021, with its biggest pullback being seen at 48.51% 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.
6. Price Simulation for Dogecoin
How did quantdoge simulation perform vs the actual DOGE price movement over the last week ?
Over the last 7 days, DOGE has been trading beyond the higher 75-th quantile price range of quantdoge simulations, indicating that DOGE was trading at a heavily overbought level over the last week.
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If you are into Polkadot (DOT) and Bitcoin (BTC), I have made similar analysis on them at:
- 2 May 2021 (SUN)- Polkadot (DOT) Daily Risk Report
- 1 May 2021 (FRI)- Bitcoin (BTC) Daily Risk Report
If you like my analysis and articles, please follow me at @quantdoge for daily updates.
