Currently, the digital asset dogwifhat [WIF] is trading at $2.57, showing a 4.7% increase over the past 24 hours. WIF, noted as the top meme coin running on Solana [SOL], has faced downward pressure, with a 2.5% decrease in the previous week.
The recent surge in WIF’s value comes amidst a broader recovery within the Solana meme coin ecosystem. According to data from CoinGecko, the combined market capitalization of meme coins based on SOL has risen by close to 7% in just one day.
Indications now point towards a possible reversal in WIF’s downward trend. Looking at the one-day chart, WIF’s Stochastic Relative Strength Index (RSI) plummeted to an oversold level of 11.
This significant drop suggests that the downward trajectory of WIF was mainly due to selling pressure, as traders aimed to lessen their losses. Furthermore, the Stoch RSI has now aligned with the signal line from below, hinting at a potential reversal on the horizon.
On the flip side, the Moving Average Convergence Divergence (MACD) displays a bearish stance, positioned below the signal line with negative histogram bars, indicating that bears are striving to take control of the market movement.
Should WIF succumb to the prevailing bearish sentiment, it might seek support around the 0.236 Fibonacci level, sitting at $2.2.
Yet, if selling pressure eases and buyers enter the market, WIF could see a robust uptick, possibly surpassing $3 and aiming for the 1.618 Fib level at $3.50.
Rise in Short Positions for dogwifhat
There has been a notable uptick in short positions for WIF. This is evident in the long/short ratio, which has fallen to 0.90, marking its lowest point in the last month. Roughly 52% of derivative traders have opted for short positions on WIF, while 47% have gone long.
The surge in short positions is further highlighted by the funding rate attributed to WIF. Recently, this metric surged to a multi-week peak of 0.01%, indicating that long traders were ready to pay higher fees to keep their positions intact.
However, at the present moment, the funding rate has decreased to 0.0054%, signaling that long traders are closing their positions.
An escalation in short positions heightens the chances of a short squeeze. If WIF’s upward momentum continues, these short sellers might be compelled to buy back, thereby reinforcing the upward trend.
The positive crowd sentiment surrounding WIF on Market Prophit also hints at a potential ongoing uptrend. Optimistic sentiment could spark increased buying interest, potentially weakening the prevailing bearish trends.