Currently, dogwifhat (WIF) is trading at $3.22, marking a 5% increase over the past 24 hours. This surge has pushed the memecoin’s monthly gains to 54%, with many long-term holders taking profits.
Lookonchain data reveals that a trader known as “blockgraze” recently transferred 1.5 million WIF tokens, valued at $4.56 million, to Coinbase after holding them for 8 months.
Although “blockgraze” has not sold these tokens yet, the movement coincides with some bearish signals appearing on WIF’s one-day chart. A descending triangle pattern has emerged, indicating a potential downturn, with $3 being a crucial support level for WIF to avoid a bearish trend.
In order to invalidate this bearish scenario, WIF needs to break through the resistance at $4.83 and gather liquidity at that level.
Signals from technical indicators are currently conflicting regarding WIF’s future price direction. While the Chaikin Money Flow (CMF) has turned negative, suggesting selling pressure dominance, the Awesome Oscillator (AO) bars have turned green, indicating a bullish divergence.
The derivatives market indicates that liquidations could play a significant role in determining WIF’s next moves as bulls and bears grapple for control.
Noticeable Surge in WIF Long Liquidations
Data from Coinglass highlights a significant increase in long liquidations, potentially hampering WIF’s upward trajectory. Over $5 million worth of WIF long positions were liquidated in just two days, further consolidating the trend observed over the past two weeks.
When long positions are liquidated, traders are compelled to sell the token, potentially overshadowing buying activity and causing the rally to plateau. Examination of dogwifhat’s liquidation heatmap over the past week unmistakably displays these escalating liquidations each time the uptrend falters.
Despite this trend, there is a notable accumulation of liquidations below the current price level. These liquidation clusters often serve as magnetic zones that could trigger a downtrend if WIF drops below $3, leading to further price decline.
Surging WIF Funding Rates Reach New Heights
Even with numerous long traders facing liquidation, their positions continue to dominate the market, reflecting an overall bullish outlook on WIF.
Presently, WIF’s Funding Rates have soared to a record 0.0555%, indicating traders’ willingness to pay more to uphold their long positions.
However, traders should remain vigilant for a potential long squeeze if WIF unexpectedly experiences a price decline, as this could trigger a surge in liquidations, fueling a sustained downtrend.