As of the current moment, the digital asset dogwifhat [WIF] continues to show a downward trend when observing the daily chart. Despite experiencing consistent losses in its value, there are signs indicating a potential recovery. Notably, a bullish momentum divergence has been identified through technical analysis. While the liquidation heatmaps suggest a price target exceeding $2 for WIF, the buying pressure appears to be inadequate.
Will the bulls manage to initiate a recovery, or will they struggle to surpass previous local peaks?
Assessing WIF’s Recovery Prospects and Potential Losses
The most recent peak observed for WIF on the daily chart stood at $2.22 earlier this month. Subsequently, it recorded a lower low and rebounded to test the $1.878 resistance level, thereby sustaining its bearish trajectory.
The A/D indicator displayed a downward trend, highlighting the prevailing selling pressure. Furthermore, the Awesome Oscillator remained positioned below the neutral line, signaling a bearish momentum. Nevertheless, an optimistic sign emerged as the AO formed a bullish divergence with the price.
These indications hint at a likely conclusion to dogwifhat’s downward trajectory since November. However, the caution is advised for traders until there is a noticeable increase in capital inflows.
An examination of the 3-month liquidation heatmap outlined the $2.25 range as a significant area of interest. Notably, the earlier peaks from January have accumulated numerous liquidation levels, transforming it into a notable target owing to the liquidity attraction principle.
Looking ahead, if the price surpasses $2.3, the subsequent medium-term target would rise to the $3 mark.
Analysis of the recent month’s liquidation data underlines the significance of the $2.25 range as a critical liquidity pool. On the flip side, traders may find the $1.7 level noteworthy for potential trading activities.
A scenario where WIF undergoes a price decline to $1.7 before ascending towards $2.25 is plausible. The current stance suggests that a breakout beyond $2.25 appears improbable due to the prevailing lack of buying pressure. Nevertheless, this situation might transform in the upcoming weeks.
Disclaimer: The opinions presented are solely personal views and do not constitute financial, investment, trading, or any other form of advice.