In the last 24 hours, dogwifhat [WIF] corrected its double-digit decline in price from the previous day as it rose back to the $0.20 level.
WIF was also enjoying a spike in volume of about 29%, reaching $102 million.
Data from Solscan showed market makers and exchanges were moving their WIF tokens for liquidity purposes. For instance, Wintermute transferred 763K WIF into its automated liquidity pool.
Is the liquidity enough to push the WIF price in either direction?
Is WIF’s price breakdown a fakeout?
The charts showed that WIF broke down below the key support level of $0.20 and then tapped the level at approximately $0.18.
What followed was a bounce back to this level, but price has since failed to reclaim the support. Right now, WIF seems to be retesting $0.20, probably for a bearish market continuation.
The Bollinger Bands (BB) were still moving sideways, contrary to how they open up after breakouts. The middle level of the BB rejected higher price advances as it aligned with $0.20 as a new resistance zone.
Source: WIF/USDT on TradingView
Only reclaiming this level would flip the price to at least target $0.26, the top of the sideways consolidation. This would mean the drop to $0.18 was just a fakeout.
Otherwise, the tap into $0.20 remains a retest of the bearish trend.
Interestingly, the bulls were starting to step in as the Stochastic Momentum Index (SMI) rebounded from the extreme oversold conditions at negative 77 to 1.35.
This indicated bulls were gaining strength against bears, but WIF was still bearish technically.
Are bulls intervening?
The Aggregated Long/Short Accounts Ratio was rising, with the current reading at 1.87, which meant that more accounts were buying WIF than selling at press time.
However, this metric is dynamic and subject to change, though it offered insights on current activities of the memecoin.
The Open Interest (OI), which had been falling since the middle of January, also leveled off at $43 million for the past month. Currently, it has risen from $38 million to $47 million.
Source: Coinalyze
The OI affirmed that bulls were stepping in as it rose alongside price action on the 4-hour chart. Despite the bullish intervention, WIF was still confined between high liquidity clusters. Hence, its direction bias was still unknown.
WIF confined between dense liquidity clusters
The liquidation heatmap indicated that WIF was navigating between the dense liquidity clusters at $0.18 and $0.21.
The clusters around $0.18 could pull the price toward this level or lower, while those around $0.21 could push WIF higher. This is because price has a tendency to trade toward zones of high liquidity concentration.
Source: CoinGlass
Therefore, the WIF data showed its price could move either toward $0.18 and lower or toward $0.21 and higher. The two scenarios depended on which zone was triggered first.
Final Summary
- WIF price action breaks below the $0.20 support level and seems to be confirming the bearish retest.
- WIF bulls were intervening in the drop, though liquidity clusters at $0.18 and below could hinder potential recovery.
