- A breach above the $3.25 resistance might send WIF to $6.50.
- The stablecoin supply showed that market participants had the purchasing power to drive the price higher.
Solana-based memecoin dogwifhat [WIF] has lost 16.36% of its value in the last 30 days.
This performance was in contrast to the price action which saw WIF produce a stunning 1,650% increase on a Year-To-Date (YTD) basis.
Not many cryptocurrencies can boast of this showing this year. But with a solid community, WIF has been able to outperform almost every other popular memecoin this cycle.
As of this writing, WIF’s price was $3.02. But before this recent decrease, the token got close to hitting $5. However, the attempt was rejected at $4.84 which is its all-time high.
Bulls have the upper hand
Despite the fall, many market participants are confident that the token will tap a new high soon. For some, the crypto might reach $10. For others, a 5x increase to $15 remains a plausible price prediction.
If WIF hits $10, then it means the market cap of the project might surpass $10 billion. However, it is important to look at the possibility before concluding.
The first indicator AMBCrypto considered was its Funding Rate. If funding is positive, it means that the perp price of an asset is trading at a premium compared to the index value.
In this case, most bets tilt toward the bullish side. On the other hand, negative funding means that the perp price of a cryptocurrency is at a discount to the spot value.
This also indicates a broader bearish sentiment in the derivatives market.
At press time, WIF’s Funding Rate was 0.008%— lower than it was seven days ago. But one thing we observed was that WIF’s price has been moving higher within the last hour.
Source: Santiment
A suitable inference for this movement is that a chunk of the spot volume were buy orders. As such, the price of WIF could be set to bounce.
WIF needs to break $3.25
Validation of this bullish prediction could send WIF toward $3.65 for a start. In terms of the long-term targets, AMBCrypto analyzed the token from a technical point of view.
On the 4-hour chart, the Supertrend flashed a buy signal (green) at $3. However, there was a sell wall (red) at $3.25. Previously, WIF has attempted to cross this resistance,
However, bears rejected the move, leading the price back to being on the verge of a decline to $2.76. However, the Money Flow Index (MFI) showed that WIF might not drop that low.
This was because the MFI reading was close to 60.00, indicating that a good amount of liquidity has flown into WIF’s side of the crypto market.
If this reading continues to increase, the bulls can successfully break through the $3.25 resistance. However, the Relative Strength Index (RSI) was below the midpoint.
But the reading showed signs that it could rise past 50.00, to validate the bullish momentum. Should this be the case, WIF could be a move that sets it toward $6.50.
However, a highly bullish situation could drive the price of WIF to $10 in the long term.
Source: TradingView
For some, this might happen before the end of 2024. However, others believe that the price of the memecoin might not hit double digits this year.
Open Interest drops but it is not the end
Furthermore, WIF’s Open Interest (OI) was $251.38 million at press time. OI increases or decreases based on net positioning. If the indicator increases, it implies an increase in liquidity allocated to contracts.
In this situation, buyers are aggressive. Conversely, sellers are aggressive when the OI decreases. According to data from Santiment, WIF’s OI was almost two times lower than the value in March.
If traders decide to open more positions, WIF’s price might recover. However, it would take a lot of capital to take the token toward its previous high.
But AMBCrypto observed that it might not be difficult to achieve. This was because of the stablecoin supply, held by WIF whales, and valued at over $5 million.
Source: Santiment
As of this writing, this metric had begun to rise, indicating that WIF large investors were armed enough to push the price higher.
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Should the stablecoins be deployed toward buying the token, a significant price increase might occur.
However, it might be impossible for WIF to repeat its 883% 90-day increase. Nonetheless, an increase to $10 is a possibility for the token. If (when) it would happen is something that AMBCrypto cannot guarantee.