Dogecoin with a Hat (WIF) poised to break ATH of $5 with a condition

Dogecoin Wearing a Hat (WIF) Gearing Up to Surpass All-Time High of $5 under Certain Conditions

In the last 24 hours, dogwifhat [WIF] witnessed a significant nosedive of 18.98%, triggered by a broader downturn in the market sentiment.

The selling pressure seemed to be easing as WIF started its upward trajectory. However, some sections of the market remained pessimistic, impeding the progress of a potential price surge.

Heading towards a Recovery

As per an analyst’s observation, WIF seemed to be in a favorable position for a potential comeback as it traded within a parallel channel.

A parallel channel signifies a phase where prices move between predefined support and resistance levels. At the current moment, WIF had responded to the support level and was climbing upwards.

The chart pattern, however, indicated that a prolonged consolidation phase might persist near the lower support level before a significant upward movement.

If WIF manages to break out of this phase, its next milestone would be reaching a new peak of $5, a level last seen back in November 2024.

Presently, the market sentiment appears mixed, with some traders anticipating an upward trend while others foresee a potential downtrend in the future.

Buyers Maintaining WIF’s Stability

Over the past eight hours, the Funding Rate for WIF has gradually risen to 0.0044%.

A positive Funding Rate indicates a preference for long-position traders in the market, with this group willing to pay a premium to hold onto their positions.

Spot traders have witnessed a notable outflow of capital. In the last day alone, WIF worth $1.67 million has exited the market, suggesting an increased likelihood of an upward price movement.

This marks the fourth consecutive day of withdrawals, with the most substantial outflow of $11.88 million recorded on the previous day.

Substantial withdrawals from the market often indicate that participants are transferring tokens off exchanges, potentially for selling purposes.

Potential for Sellers to Drive WIF Lower

Sellers remain active in the market, exerting downward pressure on WIF. An important metric, Open Interest, has turned negative, dropping by 10.01% to $403.15 million.

A decline in Open Interest suggests that derivative traders are closing their positions instead of keeping them open, reflecting a gradual loss of confidence in the market’s upward momentum.

Further, liquidations worth $8.51 million occurred in the past day, predominantly affecting long traders. Long positions incurred losses of $8.05 million as opposed to only $459,950 for short positions.

When the difference between long and short traders is significant, it often indicates a bearish market sentiment, signaling a higher probability of further price drops.

Given the decline in Open Interest and liquidation figures, the anticipated consolidation phase on the chart is likely to persist, keeping WIF subdued for the time being.

Despite this, if accompanied by positive narratives from on-chain metrics, WIF might discover new catalysts to propel it towards the $5 mark in the coming days.