The Dogecoin Price is back in the spotlight after a sharp price drop that caught the attention of traders and analysts over the weekend. According to DOGECAPITAL’s analysisthe recent decline brought Dogecoin back to a key support level that was important in the past. Dogecoin’s price research compares the current situation to a time when the coin also fell to the same level years ago and then started a strong recovery. DOGECAPITAL says this could be another turning point for Dogecoin if the same pattern repeats.
Dogecoin price drops to historic support after liquidation event over the weekend
DOGECAPITAL reports that a major liquidation event over the weekend pushed Dogecoin ($DOGE) sharply lower. DOGECAPITAL notes that the price drop of Dogecoin has brought it exactly to the bottom green line on the chart, a level that occupies a special place in the history of the currency.
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According to DOGECAPITAL, this same level was last seen on March 13, 2020, during the COVID crash, a time when fear gripped the entire financial market. That moment marked what analysis calls the bottom of Cycle 2, the point from which Dogecoin began one of its biggest rallies ever.
Because of this history, the analyst views the current price level as more than just another dip. For now, the analyst’s focus is on how the Dogecoin price reacts around this zone. If the coin can stay above this support area, it can rebuild strength prepare for another run up.
DOGECAPITAL sees potential for major upside if history repeats itself
DOGECAPITAL points out that Dogecoin achieved the same thing last time support level, the results were extraordinary. After hitting that low point in 2020, Dogecoin rose about 540 times over the next 420 days. The rally took the coin from that lower green line all the way to the upper green line, where it peaked during that cycle.
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In its current view, DOGECAPITAL believes that a similar setup could form again for the Dogecoin price. According to DOGECAPITAL’s research, the coin may be entering a new recovery phase, building momentum before making a more decisive move higher later. While Dogecoin’s current price action may seem weak at first glance, DOGECAPITAL’s research suggests that it could actually be preparing for again strong upward pressure.
DOGECAPITAL suggests that traders across the market are now closely watching for signs of strength that could confirm this theory. The analyst recalls how quickly Dogecoin went from undervalued to one of the best performing coins in previous cycles. If the Dogecoin price can turn this decline into a base for growth, this could be the start another big bullish cycle that brings new excitement back to the Dogecoin market.
Featured image created with Dall.E, chart from Tradingview.com