WIF Rally Faces Peril After 50% 30-Day Surge
Dogwifhat (WIF), the biggest meme coin on Solana in terms of market capitalization, has shown a significant recovery in the past month. This impressive bounce has led to a 50% increase in WIF’s price, with the coin almost reaching $3.
However, despite the rally, technical analysis suggests a potential correction might be on the horizon. A classic bearish formation has emerged, which typically indicates a possible downturn.
Dogwifhat Forms Bearish Pattern
On October 14, WIF approached the $3 mark, but the resistance at $2.82 prevented the meme coin from reaching that threshold again for the first time since July.
Following this development, BeInCrypto noticed that WIF had formed a rising wedge on the daily chart. This pattern, also known as an ascending wedge, occurs when two upward slopes converge, signaling an impending reversal in the downward trend.
In most cases, this wedge indicates that a cryptocurrency has reached its local peak. For WIF, it seems that the local peak occurred around $2.96, where the top of the green candlestick touched on Monday.
The Money Flow Index (MFI) is another indicator suggesting a potential correction for WIF. The MFI evaluates both volume and price to assess buying and selling pressure in the market.
An increase in the MFI reflects growing buying pressure, while a decrease signifies increasing selling activity. As shown below, the MFI on the WIF/USD daily chart has declined and is on the verge of falling below the neutral line.
Under these circumstances, it appears that WIF’s price has lost its bullish support and could undergo an extended decline.
WIF Price Prediction: 20% Correction Ahead
A closer examination of the daily chart indicates that WIF might struggle to surpass $2.82, as it seems to be following a downward trend since July.
On July 22, WIF reached $2.82 but encountered resistance. By August 6, the price had plummeted by 55% to $1.25. However, this doesn’t necessarily imply that Dogwifhat will experience a similar decline.
Nevertheless, a rapid recovery appears unlikely. WIF could experience a 20% decline, as indicated by Fibonacci retracement levels, which highlight potential support and resistance levels.
If the token falls to the 50% retracement level, it could reach $2.08. However, if bulls defend the $2.33 support, WIF could rebound to $3.11.