The memecoin sector rebounded by more than 4% as volume jumped by 51% in line with the broader crypto market. Top-cap memecoins spearheaded the rally, with dogwifhat [WIF] surging by 12%, making it one of the top ten gainers in the past 24 hours.
Other memecoins that recorded similar or more gains were Pepe [PEPE], Fartcoin [FARTCOIN], and SPX6900 [SPX]. This indicated a broader recovery, but what really drove WIF’s price?
Is leverage behind WIF’s daily surge?
The daily percentage surge was equal to the weekly gains. The numbers were improving as the narrative to classify memecoins as “digital collectibles” rather than securities by the SEC and CFTC gained pace.
The derivatives data showed that the Long/Short Ratio was buyer-dominated, as the readings were above 1. This showed traders were buying more than selling, with those on Binance leading with 1.3359, followed by OKX at 1.14.
For Top Traders, the ratio for Accounts was 1.6151, while the ratio for Positions was 1.4804, indicating that smart money, along with retail traders, was buying the dogwifhat meme coin.
Additionally, the Open Interest (OI), Funding Rates, and volume were increasing. The OI jumped to $105 million, more than the volume, which was at $75 million.
The OI-Weighted Funding Rate was green over the past two days with a reading of 0.0051%. This indicated the market’s leverage was still adjusting, with buyers adding more risk.
Such a reading suggested that leverage could be behind the daily surge in price alongside a bullish market structure.
WIF facing resistance at a previous high
On the charts, WIF was rising as it respected an ascending trendline that had held the price since the 11th of March. This was after a lower high that was at $0.223, the price target if WIF surpasses the $0.20 zone.
Right now, WIF bulls are battling to break past $0.20, with some seemingly taking profits. This is evident as Cumulative Volume Delta (CVD) has shifted to red.
The net token change dropped from a high of 5.63 million WIF tokens bought to now about 1.17 million tokens being sold.
Interestingly, the Money Flow Index (MFI) was still indicating capital was flowing into the memecoin, though momentum had cooled off. The MFI reading was at 61.
With that in mind, only staying above the $0.20 zone could put WIF on a path toward $0.223. Reclaiming the $0.223-$0.230 zone would shift the market structure on the daily chart to bullish.
Final Summary
- dogwifhat jumps 12% as leverage on longs, volume, OI and Funding Rates jump.
- WIF is moving towards $0.23, but this can only happen if it stays above $0.20.
