Earlier today, dogwifhat (WIF) saw a decline below $3 amid a broader market slowdown that has affected many cryptocurrencies. However, the price of WIF coin quickly rebounded and is currently trading at $3.16.
But does this mean that Solana will the coin itself continue to rise? This analysis examines this possibility.
Dogwifhat sees resurgence in buying pressure
The rapid rebound of the WIF could be linked to an increase in Chaikin Money Flow (CMF). On the daily chart, the CMF remained in a high position.
CMF is a technical indicator that assesses the flow of money into and out of an asset over a specified period of time. It helps gauge the strength of a trend, the balance between buying and selling pressure, and overall market sentiment.
Positive CMF readings indicate strong buying pressurewhile negative readings suggest selling pressure. Therefore, the current reading on the WIF/USD chart shows that buying pressure exceeds selling pressure.
If this remains the same, the price of WIF coins could continue to rise. Following this, Santiment data shows that the funding rate remained in the positive region. For context, the funding rate is the cost of holding an open position in the perp market.
A positive funding rate indicates that buyers (longs) are paying sellers (shorts), which makes it possible to align eventually price with spot price. Conversely, a negative funding rate means that short positions are paying for long positions and the average sentiment is bearish.
According to Santiment, the WIF funding rate has soared, indicating that traders are optimistic about the recovery of the meme coin. Therefore, if request increases, the price of WIF could increase and most long positions could be profitable.
WIF Price Analysis: $4 on the Radar
On the daily chart, WIF was formed an inverted head and shoulders pattern. The inverted head and shoulders is a chart pattern that suggests a potential reversal of a downtrend. Unlike the head and shoulders pattern, it consists of three hollows, with the middle hollow being the lowest (the “head”) and the two surrounding hollows forming the “shoulders”.
Generally, this trend goes from bearish to bullish. As such, it appears that the price of WIF could continue to rise. With this in play, it is likely that the meme coin will rise back to $4.07.
On the other hand, if the CMF reading drops below the midpoint, it will suggest selling pressure. In this scenario, WIF could decline at $2.44.
Disclaimer
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