Dogecoin and Ripple prices have become the latest examples of how pump and dump schemes work. The XRP price is trading at $0.3641, which is 52% below yesterday’s high of $0.7580. On the other hand, Dogecoin price is at $0.033, which is 52% below its all-time high of $0.0733.
What happened: For starters, a pump and dump scheme happens when a person or a team of investors band together to inflate the price of an asset. As the price rises, it attracts other speculators. After bagging their returns, the original buyers sell, pushing the price lower.
Like I wrote yesterday, this is what was happened to both Ripple and Dogecoin prices. DOGE started rising last week with no news at all, becoming one of the biggest digital currencies in the world. During the weekend, traders started to push Ripple in popular Telegram and Reddit accounts. As shown below, the Buy & HODL XRP Telegram account has almost 200k users.
Therefore, as the price started to drop, many of the buyers exited, leading to more downward pressure. The same trend was seen in other popular meme stocks like Gamestop whose share price dropped by 30% yesterday and is also down by more than 15% in the extended hours.
Dogecoin price prediction
On the daily chart below, we see that the Dogecoin price is in a consolidation phase. It is 50% below its all-time high and 53% above its lowest level on Friday. This pattern seems like a bullish pennant pattern. Therefore, like I wrote yesterday, while Dogecoin seems to be out, this chart pattern shows that the price could even retest the all-time high. However, as a highly volatile currency, anything can happen, meaning that you should only invest a small amount of money in it.
Ripple price Forecast
The XRP price has been extremely volatile in the past few days as evidenced by the Average True Range (ATR) and the Historical Volatility indicators. The price is also under intense selling pressure today as previous HODLers take profit. In my view, the Ripple price could continue falling as bears target the previous descending channel that’s shown in black. The short-term target is a drop to $0.30.
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XRP price chart