- WIF’s value has dropped by nearly 86% from its November 2024 peak
- While the RSI flashed a mild bullish divergence, overall derivatives data still underlined a bearish edge
Despite brief optimism after Trump announced plans for an upcoming U.S Crypto Reserve, the crypto markets saw more sideways movement over the last 48 hours. Dogwifhat’s (WIF) price peaked at around $4.8 in November 2024. However, since then, it has been making lower highs and lower lows on the charts.
At press time, the altcoin was trading below its 20 EMA, 50 EMA, and 200 EMA – A sign of strong bearish sentiment.
Gauging WIF’s potential to rebound
A quick glance at the last several months revealed a steep downtrend, with WIF down nearly 86% from its November highs. The daily chart showed WIF’s price being compressed within a falling wedge structure (roughly from the December highs).
At press time, this channel’s lower boundary seemed to provide reliable dynamic support throughout the downtrend. Here, it’s worth noting that the latest break outside the pattern makes WIF prone to high volatility in the near term.
Source: TradingView, WIF/USDT
The nearest dynamic resistance was the 20-day EMA. However, the first major resistance level on the chart was the horizontal resistance around $1.4 – Still far off from the press time price levels.
So, buyers should look for a convincing move towards the 50 EMA to gauge the chances of a stronger uptrend. Reclaiming this would be a more convincing bullish signal.
It’s worth noting that the immediate support seemed to be around $0.55–$0.56 – Nearly the altcoin’s yearly low level. WIF could see another steep downtrend if the price breaks below this level under bearish pressure.
The RSI was hovering near 39–40, reflecting a strong bearish edge. Any move above 50 would hint at a potential change in momentum. The RSI also had a mild bullish divergence with the price action, but a close above the midline would confirm this.
However, looking at the ongoing uncertainty in the crypto markets, it’s best to look for multiple bullish signals before taking a long position.
Derivatives data revealed THIS
Source: Coinglass
Finally, a drop in volume hinted at lower trading activity or fading volatility in the last 24 hours. This can happen if traders are uncertain about the near‐term price direction or if a large wave of positions has already been closed.
Also, a significant drop in OI often means many positions are being liquidated. Another drop could lead to slower price movement, unless a fresh catalyst brings new positions.
On a broad level, the overall long/short ratio over the past 24 hours was slightly below 1 – Indicative of a marginal tilt towards more shorts than longs. However, this ratio seemed to significantly favor bulls on exchanges like Binance and OKX.
