Following its recent peak, Dogwifhat (WIF) experienced a significant 35.95% drop, bringing its current trading price to $3.0673 as of the latest update.
This notable retreat has led to the formation of what seems to be a bullish flag pattern on the daily chart.
What Signals Do These Bullish Flag Patterns Convey?
Typically, bullish flag patterns are seen as continuation signals, suggesting that the previous uptrend in WIF is likely to resume once the corrective phase concludes.
The recent breach of the upper trendline of the flag pattern now has the potential to serve as a support level, setting the stage for a potential upcoming rally. As WIF nears this crucial support area, a rebound from this point could signify the commencement of another upward move.
Furthermore, the stochastic RSI indicator is currently in an oversold region, boosting the probability of a turnaround following the ongoing price adjustments.
Noteworthy Accumulation of WIF by Whales
Fascinatingly, an examination of on-chain data indicates that wallets holding more than 5 million WIF have been consistently growing their positions during this downturn.
This trend suggests that major institutional players perceive value in the memecoin at its current levels, actively building up their reserves.
Social Media Activity and Long-Short Ratio Insights
Despite the recent fallback, the social volume surrounding Dogwifhat has generally been on the rise since the start of November, showcasing continued interest and involvement from the cryptocurrency community.
Conversely, there has been a decrease in social mentions over the last three days. This drop could hint at a short-term pullback for the memecoin before it resumes its overall positive trajectory.
Furthermore, the WIF Long-Short Ratio has not experienced a significant decline, indicating that traders are still favoring long positions over short positions on the asset.
These optimistic indicators suggest that the positive sentiment towards WIF remains robust even amidst the ongoing correction phase.
Future Prospects for WIF
With both technical analysis and on-chain data painting an encouraging picture, the potential for a bullish reversal in WIF seems promising as investors await a clear bounce off the flag support before considering long positions.
A successful rebound from this critical support level could lay the foundation for a possible bullish upswing.