The price of Solana-based dogwifhat (WIF) has surged by 30% since September 23, driven by increasing interest in meme coins. While this upward trend has produced new gains, the token remains 55% below its peak from March 31.
Nevertheless, various on-chain indicators suggest that WIF’s recent breakout may be just the beginning of a sustained bull market. Here’s why.
Dogwifhat Experiences Significant Growing Interest
One key indicator pointing to a possible price rally for WIF is the Open Interest (OI), which reflects the total value of outstanding contracts associated with the cryptocurrency.
An increase in Open Interest indicates that traders in the derivatives market are seeking greater exposure and injecting more liquidity. Conversely, a drop in OI reflects a retreat in net positioning, suggesting that capital is exiting the market.
Typically, when OI declines amid a price increase, it can signal a reversal of the cryptocurrency’s gains. In WIF’s instance, the recent price rise to $2.25 has coincided with a significant increase in Open Interest, reaching $311.94 million.
Read more: How To Purchase Dogwifhat (WIF) and Other Relevant Information
In March, WIF consistently exhibited such movements, with the meme coin’s price reaching $4.78. Therefore, a continued increase may drive the price toward that threshold, or even higher.
In tandem with this shift, traders appear to be gearing up for a significant rise, as suggested by the Funding Rate. This rate represents a periodic payment between traders engaged in perpetual futures contracts, aiming to align the contract’s price with the spot price.
A negative Funding Rate indicates that the price of the perpetual contract is lower than the spot price, suggesting traders anticipate a price decline and are shorting the asset. Conversely, a positive Funding Rate implies traders are going long, expecting prices to increase.
As funding remains positive and WIF’s price continues to rise, it indicates that longs (buyers) are active, which could be a bullish sign for the meme coin.
WIF Price Outlook: Meme Coin Targets $5
Technical analysis of the daily chart illustrates that WIF’s rebound from $1.15 in August was a critical driver of its recent surge to $2.25. Additionally, the Moving Average Convergence Divergence (MACD) is currently positive.
The MACD serves as a technical oscillator that gauges momentum and directional strength. A negative reading indicates bearish momentum, suggesting a potential price decrease. However, for WIF, a positive MACD signals bullish momentum.
Though WIF could surpass the $4 mark, it may face resistance at $3.78. A successful breakout beyond this level would allow it to reach $4.58 and possibly hit $5.
Read more: 5 Top Dogwifhat (WIF) Wallets To Consider In 2024
A rejection at $3.78 could undermine this optimistic outlook. If that occurs, the value of the meme coin might decline to $1.69.
Disclaimer
In accordance with the Trust Project guidelines, this price analysis article is intended solely for informational purposes and should not be interpreted as financial or investment advice. BeInCrypto strives for accuracy and unbiased reporting, but market conditions can change without prior notice. Always perform your own research and consult a professional before making any financial choices. Please be aware that our Terms and Conditions, Privacy Policy, and Disclaimers have been revised.
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