On January 29th, the market for trendy digital currencies experienced a decline, witnessing a decrease in total market capitalization by approximately 2% to $92 billion.
Despite this, the meme token dogwifhat [WIF] based on Solana [SOL] stood out by defying the prevailing bearish patterns, showcasing an impressive 12% surge within a 24-hour period to reach $1.32 at the current moment.
Following a drop to less than $1, WIF is now on an upward trajectory, attracting buyers who have significantly increased trading volumes by 210% to $1 billion according to the latest data from CoinMarketCap.
Simultaneously, short liquidations have surged to $2 million per Coinglass, marking the highest level seen in a fortnight.
Given the rising short liquidations contributing to the purchasing pressure, the big question remains – is WIF gearing up for a robust recovery, or will the bears regain dominance?
Analyzing the Price of dogwifhat
The resurgence of dogwifhat from its lowest levels in months aligned with strong buying activities, hinting at a probable continuation of the bullish trend.
Nevertheless, for the bulls to maintain control, WIF must successfully surpass the resistance at the 0.786 Fibonacci level, which stands at $1.62.
The Relative Strength Indicator (RSI) displayed a notable upward shift, generating a buying signal upon crossing above the signal line.
Despite this positive movement, the RSI value lingers in bearish territory at 40. To solidify a bullish momentum, the indicator should rise beyond 50.
The on-balance volume (OBV) indicator, with a negative value, mirrored a similar sentiment. The buying pressure has yet to surpass the selling pressure, posing a risk of stalling the rally.
If WIF manages to overcome the resistance at $1.62, it could spark a bullish reversal. Conversely, a failure in the uptrend leading to WIF slipping below $1 could pave the way for a continued bearish trend.
Crucial Levels to Monitor
The closure of short positions worth $2 million triggered a surge in buying pressure, propelling WIF to a strong rebound above $1.
Current data on WIF’s liquidation heatmap, with a 24-hour retrospective glance, demonstrates how the memecoin bounced back during the exit of these positions.
The subsequent liquidation cluster positioned above the current price at the moment is $1.37. Reaching this mark and witnessing short sellers transitioning into forced buyers could fortify the uptrend.
Meanwhile, traders should stay vigilant for a possible decline to $1.26 that might prompt long liquidations. A drop below $1 towards $0.97 could potentially instigate a more pronounced downtrend due to a substantial cluster of liquidations at this level.
Can WIF Regain Its Lead Among Solana Memecoins?
The realm of Solana meme coins has been buzzing with activity post the launch of Official Trump (TRUMP), which currently holds the crown as the largest SOL-based meme with an impressive $5.57 billion market capitalization.
WIF, sporting a market cap of $1.32 billion, holds the third spot after BONK [BONK]. Extending its recent gains and sustaining the uptrend could position WIF to outshine BONK in the immediate future.
However, to reclaim its top position, WIF must rally beyond $5.