6 May 2021 (FRI)- 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. Top Bad News for DOGE HODLERS !!!

3. How Dogecoin Performs Relative to Other Cryptos ?

35865b0c6a8b78c5919f0fbf865079cfae55bff6667b5a79b582bde0149086ab.jpg

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)

142e8d0f5bc171b184ed127c4ea3afc2e6b7a0bf4d2956f93508c5a39c9f72cd.jpg

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)

81aa3cb2496f94e8e91b863b51422199542226b03a145b0ab059e47f8def0ac5.jpg

 

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

b64e8c93a3df877c02f555a16879ece1cc06ba202a4a104e401da58afbd550a1.jpg

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)

d11887ddb13cc0ac39be630cacca2275c042db939950008162dcc0c1f4d11904.jpg

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

14d11b72e742d134198f78f90ffc4113e7f15e28b1a219dc92ec3b914a41aad9.jpg

53db3e40da17befbbed09d86029ffa2ca1faf2c9ba0f22c791c43b5e9846a70f.jpg

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

03e634b39fdf9b77b6afdaca166e17122ecd991423e3ae3ee9146c5aff74cde3.jpg

6b4b375d5939677acd91892f96d0984b6fc4aa1f96a88ca6d70f705b386cad8a.jpg

69cdcd8aec43bdd764660ad6189bb7e06627d2a2b20b36f1999a80fa3391e8e6.jpg

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

3ac640bf83d5b9aa875ce5ae72a52a8b76e56da86077ba4ca12d73ee84319176.jpg

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.

bbb490509404f52574bb237001fb309f0f948373a03b24b7ea28e24b24747573.png

Are you looking for a crypto wallet which offers you an easy way to securely store your crypto while giving you the ability to earn crypto? Look no further than Coinbase, the cryptocurrency exchange and custody which has just went public in NASDAQ this month. You would get around USD 10 worth of free bitcoin if you sign up with my referral link below: 

https://www.coinbase.com/join/lim_2kx

Besides, you would also be able to earn free cryptocurrencies via Coinbase Earn program where you need to do is just complete a series of short lessons about different cryptos. 

If you are into Polkadot (DOT) and Bitcoin (BTC), I have made similar analysis on them at:

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

 

How do you rate this article?


4

1

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.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.