Following a recent decline of more than 20% in value over the past few days, the meme coin dogwifhat [WIF] built on the Solana [SOL] platform is showing signs of a potential rally upwards.
Since the start of September 2024, the Open Interest for WIF has steadily increased from $199 million to $221 million, as reported by Coinglass.
Positive Indicators Surface
The rising Open Interest amidst a bearish market sentiment could signal a forthcoming price reversal.
The OI-Weighted Funding Rate also supports this optimistic view, showing positivity and implying a rising market expectation among traders. This reflects a strong bullish sentiment.
Analysts at CryptoCrypto have highlighted WIF’s bullish trend after breaking out from the consolidation phase near the critical support level at $1.50.
The Relative Strength Index (RSI) is currently in oversold territory, suggesting a potential turnaround in price direction.
Considering the recent breakout and historical price movements, there is a significant chance that WIF could surge by 20% to reach $1.90 or higher.
Possible Reversal for WIF?
Recently, cryptocurrency expert Bluntz_Capital made observations on X (formerly Twitter), noting that WIF had successfully retested the channel pattern on a four-hour timeframe. He stated,
“Nobody is prepared for the impending V-shaped reversal.”
Based on the expert’s analysis, there is a likelihood of WIF hitting $2.2 in the near future.
Currently, major liquidation thresholds stand at around $1.547 and $1.658, as per Coinglass data, indicating high leverage among traders at these levels.
In a bullish scenario where WIF rises to $1.658, short positions totaling nearly $6.06 million could face liquidation.
Alternatively, if sentiment turns bearish and the price drops to $2.28 million, long positions worth $6.25 million may be liquidated.
At present, WIF is trading close to $1.60, marking an 8% surge in the past 24 hours.
The trading volume has seen a modest 5% uptick during the same period, suggesting increased trader involvement.