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As an active queue management algorithm, BLUE lacks incipient congestion detecting mechanism, and has some insufficiencies in parameter setting. This paper proposed a novel BLUE algorithm based on dynamic threshold. By managing the buffer, through the predicted congestion in advance, it determined the packet drop probability by packet loss event, link idle event and the buffer usage. NS simulation results show that the proposed algorithm can mitigate the queue overflow and underflow, stabilize the queue occupation and improve link utilization effectively. [ABSTRACT FROM AUTHOR]