- WIF’s price is strategically capped at $3.80, a level at which both large and small players are quickly exiting.
- The key to breaking this barrier lies in one of two circumstances.
A month ago, dog hat [WIF] exploded with a massive 30% increase, reaching $4.83 in one day – the longest green candlestick in its history.
But just as it looked poised to break its all-time high, a sharp correction took the price back to $2.90, proving how unpredictable memecoins can be.
Although investors have taken a hit, the story is not over. A deeper pullback to $2.00 may seem like a tempting entry point. However, AMBCrypto’s analysis suggests that WIF could stage a comeback, but only if the bulls play their cards right.
How did a long squeeze cost WIF a new ATH?
As the saying goes, timing is everything in crypto – and WIF bears have certainly proven this. After a massive 30% increase in one day, which brought the WIF close to a new all-time high, the RSI reached an overbought level.
Interestingly, this coincided with Bitcoin[BTC] closed above $90,000 for the first time during the ‘Trump pump’, causing real panic among investors.
The result? While Bitcoin fell 3% the next day, WIF suffered a sharp fourfold drop in comparison. Since then, the bulls have made several attempts to recover, but the $3.80 resistance level remains firmly in place.
Why? There are two main factors at play: First, market volatility is pushing memecoins like WIF into the red as the lure of quick wins with high rewards becomes more and more attractive.
Second, big players make money as FOMO disappears, clearing their positions before the market takes another turn. Together, these forces ensure that the price of WIF remains limited.
As a result, every time WIF approaches that key price point, a huge liquidity cluster of long positions is liquidated, forcing longs to close their positions. This is evident from the sharp decline in Open Interest (OI).
Source: Coinglass
OI fell from almost $1 billion to $3.80 to $541 million, at the time of writing. The impact on WIF was a sharp, long red candlestick, indicating a daily drop of over 17%, with the price of WIF now falling below $3.
Now that $3.80 has emerged as a strong resistance point, forming the right bottom will be crucial if you are “long” WIF and want to see it recover.
If successful, HODLing would be the next step, allowing the price to consolidate and possibly breakout. Keep your eyes peeled: this could be the turning point WIF bulls have been waiting for, but remember conditions apply.
Should you HODL or let go?
With Whales dumping 1.2 million WIF tokens worth $3.47 million just two days ago when the price broke through $3, it may still be too early to hit a bottom. The market has not yet completely shaken off the weak hands.
But there is a glimpse of it heap. The RSI has cooled from overbought levels, spot traders are diving in to absorb the dip and shorts are getting dangerously overleveraged.
This sets the stage for new players to make their move, and for those who own WIF, HODLing could prove to be the smartest bet.
Read dogwifhat’s [WIF] Price forecast 2024–2025
However, for a remarkable recovery, major players need to intervene. Here’s why: When whales dominate the accumulation space, it attracts both spot and futures traders looking for a discount.
However, if buying momentum picks up and spot traders push the price higher, massive short positions will emerge pinch out, potentially creating a ripple effect that could lead to the next big wave.
So if any of these conditions materialize, WIF could finally break the persistent resistance at $3.80. Keep an eye on the key factors mentioned above; it is essential to monitor them closely over the next few days.