The dog-themed meme coin, Dogwifhat (WIF), has seen a significant drop in its value in recent days. Trading at $1.85, WIF’s price has plummeted by 29% over the past week. Technical indicators suggest that the coin faced substantial selling pressure, raising concerns of further declines in its value.
What Led to the Price Drop?
The WIF price fell below its ascending channel’s lower line, considered a support level, on July 23, leading to the 29% drop, as evidenced by the charts. This fall below the support level typically indicates that the bulls were unable to defend the price, signaling a downward trend and heightened selling pressure.
Alongside the price drop, WIF’s daily trading volume surged by 127% over the past week, according to data from Santiment. This increase in trading volume, amidst a declining price, suggests significant short selling activity among meme coin holders.
Can WIF Recover Soon?
The divergence between WIF’s price and trading volume reveals the dominance of selling activity. The weighted sentiment for WIF is currently at -0.19, further indicating a bearish trend. Generally, an uptick in trading volume during a price decline reflects a bearish market sentiment.
Key Insights
Valuable Inferences:
– WIF experienced a 29% decline after failing to maintain its support level.
– Daily trading volume for WIF increased by 127% during the price decline.
– The token’s weighted sentiment is in the negative zone at -0.19.
– Relative Strength Index (RSI) and Money Flow Index (MFI) are at 38.24 and 32.47, respectively, indicating oversell conditions.
– If the downtrend continues, WIF’s price could drop to $1.48; a reversal could see it rise to $2.28.
In reviewing WIF’s fundamental indicators, a decrease in demand among market participants is evident. The Relative Strength Index (RSI) and Money Flow Index (MFI) stand at 38.24 and 32.47, respectively, highlighting oversold conditions.
Should the bearish trend persist, the meme coin’s price could fall to $1.48. On the other hand, if market sentiment shifts positively, the token might climb above $2, potentially reaching up to $2.28.
