Currently, the cryptocurrency known as dogwifhat [WIF] is showing a downward trend based on the latest data available. Despite the continuous decline in value of this meme-inspired coin, there are indications that a potential recovery might be on the horizon. Technical analysis suggests the presence of a bullish divergence in momentum. However, the lack of buying pressure, as indicated by the liquidation heatmaps projecting a price target above $2 for WIF, raises concerns.
Will the bulls manage to initiate a recovery, or will they fall short of surpassing previous local highs?
Is WIF on the path towards recovery or bracing for more declines?
The most recent peak for WIF on the daily chart was recorded at $2.22 earlier this month. Subsequently, the value experienced a decrease and then rebounded to test the $1.878 resistance level, maintaining its bearish trajectory.
On the flip side, the A/D indicator showed a downward trend, reflecting prevailing selling pressure. The Awesome Oscillator, positioned below the equilibrium, signaled a prevailing bearish momentum. Nonetheless, a bullish divergence was noted between the AO and the price.
This pattern indicates that dogwifhat could be nearing the conclusion of its downward movement since November. However, without an increase in capital inflows, caution is advised for traders.
Analysis of the 3-month liquidation heatmap highlighted the $2.25 range as an influential magnet zone. The recent peak levels from January have accumulated numerous liquidation thresholds, making it a significant target, considering that price tends to gravitate towards liquidity.
In the medium term, the following target after surpassing $2.3 would be the $3 mark.
The liquidation data from the previous month underscored the importance of the $2.25 level as a significant liquidity pool. Conversely, traders might find the $1.7 thresholds to the downside noteworthy.
There is a possibility that WIF might experience a decline to $1.7 before showing upward momentum towards $2.25. At the moment, a breakout above $2.25 seems unlikely due to the current absence of substantial buying pressure. However, this scenario could evolve in the weeks to come.
Disclaimer: The opinions expressed do not constitute financial, investment, trading, or any other form of advice, and solely represent the writer’s perspective.