Memecoins have witnessed a substantial surge in value in the last month. Nonetheless, the previous week has seen significant losses in this particular sector. In the midst of this, dogwifhat [WIF] has recorded a considerable drop in its daily charts.
Currently, dogwifhat is trading at $2.24, reflecting a 2.41% weekly decline and extending the bearish trend by 4.54% in the daily charts.
Previously, WIF had been on a positive trajectory, gaining by 47.25% over the past month.
The recent price movement raises uncertainties about the future path of dogwifhat.
Current Market Sentiment
As per CryptoCrypto’s analysis, WIF has retraced to establish a bearish engulfing pattern following a surge 48 hours ago, indicating a possible short-term selling pressure.
This could potentially prompt further market correction before a new uptrend is attempted.
A bearish engulfing pattern typically emerges after a prolonged uptrend, as seen in the monthly charts, signaling a shift in market control from buyers to sellers.
Given the consistent rejection at $2.5, it suggests that sellers are currently dominating the market.
If this rejection persists, WIF might dip below $2, presenting a buying opportunity for traders to re-enter the market and push for higher levels.
Analysis of WIF Charts
Observing dogwifhat’s performance, it has displayed a strong downward momentum over the past week, indicating a potential further decline on the price charts.
The Directional Movement Index for dogwifhat portrays a solid downtrend, with the negative index of 26.5 surpassing the positive index at 22, highlighting seller dominance and strong downward momentum.
The higher placement of DMI- over DMI+ suggests a bearish market trend on the verge of turning even more bearish. This is corroborated by an increasing ADX, indicating a strengthening bearish trend.
Furthermore, the Open Interest in USD per Exchange for WIF has dwindled from $242.9 million to $187.9 million, signaling diminishing investor confidence in the memecoin’s future.
Additionally, WIF’s volume has dropped from $2.9 billion to $995.9 million, indicating waning buyer strength and a potential loss of momentum in the rally.
With a substantial decrease in volume, sellers are likely to take charge, signaling an imminent pullback.
Given these market conditions, WIF appears poised for further price decline, with its next support anticipated at $1.98, offering a potential re-entry point for market participants.