This week, dog sensation Dogwifhat (WIF) has recovered from its decline below the $2 support zone. The Solana-based memecoin has reversed Ethereum’s Layer-2 (L2) Arbitrum (ARB) and is currently testing the $2.5 resistance level. However, a crypto analyst has warned investors of a possible backlash for WIF.
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WIF puts his hat back on
Dogwifhat became the memecoin sensation of the first quarter of 2024 (Q1), returning over 2,000% earlier this year. The Solana token reached an all-time high (ATH) of $4.8 in March, but has since fallen 45%.
Despite this, investors remain optimistic about the memecoin, with some claiming that the memecoin has shown strength through the sharpest correction. Asad Saddique, CTO of Cryptonary, marked that the token “withstood 5 or 6 corrections of >70%.” For Saddique, Dogwifhat grew stronger during the retracements and ‘challenges’ for the dog-themed memecoin throne.
Notably, WIF has overtaken Arbitrum as the 38th largest cryptocurrency by market cap today, with a market cap of $2.5 billion. This feat was first achieved on March 31, when WIF reached its ATH and market cap of $4.57 billion.
A month ago, crypto trader Bluntz, who made several bullish predictions for WIF during the first quarter, shared a bearish forecast for the memecoin. According to the trader, the Solana token was set for an “inevitable” decline to the $1 range.
However, this prediction was based on a previous bullish analysis. Bluntz stated that WIF was headed for a major pullback before the next parabolic run, which could lead to another ATH.
Following the market decline, the dog-themed memecoin saw a price drop of over 43%. Earlier this month, WIF dropped from the price range of $2.6 to $1.51 on July 11.
Nevertheless, it delivered a remarkable performance this week. The token has reclaimed the $2 support zone and is showing green numbers on various time frames.
Will it shred another 40% soon?
WIF is up 8% in the last 24 hours and is trading at $2.54 at the time of writing. This performance represents a 60% and 25% price increase in the weekly and monthly time frames.
The recent price action has seemingly revived bullish sentiment towards the token. Crypto analyst Hornhairs claimed that the memecoin ‘looks solid’. According to the analyst, WIF could retest the $3 resistance level if it remains above the $2.2 price range.
However, another market watcher has warned investors of a potential downside for Dogwifhat. CrediBull declared that people view the bounces of most altcoins as “a sign of strength, but the reality is that alts and especially memes are simply higher beta versions of BTC.”
For the analyst, the current rebound is ‘nice’, but if Bitcoin (BTC) bounces or falls, Dogwifhat will follow the flagship cryptocurrency’s move ‘harder/stronger’.
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The memecoin “left a triple bottom right below us” after making a lower high on higher time frames. This suggests to the trader that the token “will likely follow with a 40% move on its own to hit those triple lows.”
Featured image from Unsplash.com, chart from TradingView.com