Dogecoin price dropped 4.97% recently, trading at $0.2200 despite recording a monthly gain of 20.57%. The decline came as DOGE hit a resistance level that has previously triggered retracements on five occasions.

The meme coin remains the largest in its category with over $32 billion in market capitalization. It currently trades 53% below its November peak and 68% above its November low.

This pattern showcases strong buying pressure at lower prices, which bodes well for further gains in the long term.

At the same time, the upper boundary of the pattern, which sits at $0.4522, is crucial as it acts as a strong resistance level.

Handles Form at Key Fibonacci Level

The cup section of the pattern shows a rounded bottom with horizontal support, while the handle portion represents a pullback from the pattern's high at $0.4522 to the pattern's low at $0.1295.

This pullback reached the 0.382 Fibonacci level of the major rally from the 2022 lows, providing support for the rebound.

Moreover, the pattern's profit target can be calculated by measuring the cup's 92% depth and projecting that distance upward from the pattern's neckline.

This calculation arrives at a target price of $0.8630, which is about 285% higher than current price levels.

However, it's worth noting that the pattern requires a decisive break above the cup's rim at $0.4522 to activate.

A failure to clear this level could lead to further price declines and postpone the pattern's implication.

On the other hand, if the pattern plays out as anticipated, it could propel DOGE to fresh yearly highs and open possibilities for even higher price movements in the subsequent stages of the bull market.

The post Dogecoin: Strong Buying Activity Despite Price Drop, Liquidation Levels Key appeared first on Benzinga.