Throughout the previous month, meme-based cryptocurrencies have seen significant growth, with dogwifhat [WIF] leading the way. Consequently, WIF has experienced substantial increases during this time.
However, at the time of this report, dogwifhat was trading at $2.37, indicating an 8.08% decrease in value over the last 24 hours.
Prior to this downtrend, WIF had been on an upward trajectory, recording a 36.53% increase on the monthly charts, with a further extension of 13.73% on the weekly charts.
This leads to the question — can the upward momentum of dogwifhat be sustained, or will a dip in the daily chart hint at a potential retracement?
Insights from WIF Charts
An analysis by CryptoCrypto revealed that following its peak at $2.8 three days ago, dogwifhat has experienced a significant decline, dropping by 17.86% during this period.
This decline has raised concerns about the future path of this meme coin. Therefore, it becomes crucial to explore other fundamental indicators.
Initially, WIF’s Relative Strength Index (RSI) has decreased from 66 to 54 within three days, indicating a higher selling pressure and market dominance from sellers.
The current trend displayed signs of weakening, hinting at a potential reversal in WIF’s price movements.
This weakening trend is further corroborated by the DMI, where the negative index surpassed the positive index. Presently, the negative index stands at 27, while the positive index is at 25.
With a decreasing +DMI, it suggests that the current trend is losing steam.
Moreover, the Open Interest per exchange for dogwifhat has dropped from $257.3 million to $207.2 million over the last three days, indicating traders are closing their positions and foreseeing a further descent.
This behavior reflects a lack of confidence as traders brace for a potential downturn.
Lastly, dogwifhat’s Long/Short Ratio has declined from 1.0072 to 0.8477 over the past three days. This signals a prevalence of short position holders, indicating a bearish sentiment from more sellers.
In simple terms, while WIF is currently in an overall bullish phase, recent days signal an impending correction. Consequently, if bearish sentiments persist, WIF is likely to find its next support level at $2.03 in the near term.
However, should bulls regain control post-retracement, they would aim to challenge the stubborn resistance at $2.8. A breakthrough above this level could propel WIF to a 4-month high of approximately $3.5.