Dogwifhat (WIF), the Solana meme coin, has seen a notable resurgence within the last two weeks. Following the gains, the cryptocurrency experienced an incredible rise in speculative activity.
This development has raised concerns about an impending correction. History shows that if bullish sentiment runs too hot, WIF’s price declines. But will it be the same this time?
Big Warning for Dogwifhat
WIF’s price is currently $2.40 after climbing by 42% in the last seven days. Alongside the uptrend, the Open Interest (OI), which measures the level of liquidity allocated for speculative activity, also reached its highest level in July.
While an increase in OI accompanied by a price increase might be bullish, an extremely high value might not. For instance, dogwifhat’s Open Interest spiked to $485 million in May as the price increased.
Days later, WIF’s price cratered from $3.83 to $2.68. In July, a similar thing happened as the OI hit $350 million, leading the price to drop afterward. Currently, WIF’s Open Interest is $322.12 million but climbing higher than this could trigger a price decrease if history repeats itself.
Read more: 5 Best Dogwifhat (WIF) Wallets To Consider In 2024
Dogwifhat Open Interest. Source: Santiment
The liquidation heatmap agrees with the bias. The heatmap identifies where large-scale liquidations might occur. When the color changes from purple to yellow, it means that there is a high concentration of liquidity at certain price ranges.
As such, the zones, also known as the magnetic region, mean that price can move toward the point. According to Coinglass, WIF has significant liquidity levels at $2.25, $2.10 and $1.95. Due to this position, the price could likely move in that direction. Hence, a price decrease could be next for the meme coin.
Dogwifhat Liquidation Heatmap. Source: Coinglass
WIF Price Prediction: Road to $3 Could Take Some Time
From a technical standpoint, WIF’s price attempted to rise past $2.48, but it has been pegged back to $2.38. Also, the daily chart shows a notable supply zone at $2.85, indicating that the meme coin might have experienced a drawback if it had reached the region either way.
Furthermore, the Relative Strength Index (RSI), which measures momentum, is overbought. As a result, the reading has turned down and could accelerate WIF’s downtrend. By the look of things, WIF’s price could see a 15% decline, potentially dropping it below $2.25 and down to $2.01.
Read more: Dogwifhat (WIF) Price Prediction 2024/2025/2030
Dogwifhat Daily Price Analysis. Source: TradingView
However, the token might defy the odds and rebound from the slight decline if buying pressure increases. In that scenario, WIF’s price might surpass the resistance at $2.85 and close in on $3.
