Following a notable price drop exceeding 20% in recent days, the popular meme coin dogwifhat [WIF] built on the Solana [SOL] network seems positioned for an upward rally.
Starting from September 2024, WIF’s Open Interest has steadily climbed from $199 million to $221 million currently, based on Coinglass data.
Positive Signs Emerge
The rising Open Interest amidst prevailing bearish market sentiment might indicate a potential reversal in price direction.
Further supporting this bullish outlook is the positive OI-Weighted Funding Rate at present, signaling a belief among traders in an upcoming price increase and showcasing a strong bullish stance.
According to CryptoCrypto, WIF shows bullish signs following a recent breakout above the consolidation zone near the critical support level of $1.50.
With the Relative Strength Index (RSI) dipped into oversold territory, there is a suggestion of a likely reversal in price.
Considering the historical price trend, following this breakout, there is a significant chance for WIF to surge by 20% to around the $1.90 mark or potentially higher.
Potential Reversal for WIF?
In a recent post on X by crypto expert Bluntz_Capital, it was noted that WIF has successfully retested the ideal channel pattern within a four-hour timeframe, with the statement,
“Anticipate the V-shaped reversal that is about to unfold.”
Based on this expert analysis, there is a likelihood for WIF to climb towards the $2.2 level in the near future.
At the moment, the critical liquidation levels stand near $1.547 on the lower end and $1.658 on the higher end, indicating overleveraged positions at these points, as per Coinglass.
If the current positive sentiment towards WIF prevails and the price escalates to $1.658, approximately $6.06 million worth of short positions could face liquidation.
Conversely, if sentiment turns bearish and the price drops to $2.28 million, around $6.25 million worth of long positions might be liquidated.
Presently, WIF is being traded near the $1.60 level, showcasing an over 8% price surge in the past 24 hours.
Its trading volume has also grown by a modest 5% during the same period, indicating increased trader participation.