Assessing dogwifhat’s ‘death cross’ – How far will WIF drop?

dogwifhat formed a death cross on its one-day chart, suggesting a continuation of bearish trends.
Despite this bearish sign, 83% of traders on Binance are long traders, betting on an uptrend.

As a seasoned cryptocurrency researcher with over a decade of experience in analyzing digital assets, I have witnessed countless market cycles and trends. The recent developments in dogwifhat (WIF) have caught my attention, particularly the appearance of a “death cross” on its one-day chart.

In my career, I’ve seen many instances where such bearish indicators have been followed by price drops, but I’ve also seen cases where the market defied expectations and rallied instead. This time around, it seems that the majority of traders on Binance are betting on an uptrend, with 83% of them holding long positions. While this could potentially lead to a short-term price correction to the upside, I remain cautious due to the current bearish outlook suggested by the death cross.

However, it’s important to remember that the cryptocurrency market is notorious for its volatility and unpredictability. As a researcher, I always remind myself to be flexible in my analysis and to stay open-minded about potential market reversals. If WIF can manage to reclaim its top position among Solana memecoins, it could be an interesting case study on the power of market sentiment and conviction among traders.

In a humorous twist, I’d like to add that if WIF does indeed rally and outperform the other memecoins, perhaps we can all look forward to a new meme trend featuring dancing penguins, bonks, and ai16z robots, with the addition of some dogwifhats for good measure. After all, who wouldn’t want to see a dance-off between these digital characters?

In 2024, Doge-with-hat [WIF] stood out as one of the top performers within the cryptocurrency market. Throughout the year, this memecoin experienced an astounding surge of over 1,000%. Yet, the momentum faltered in December following a significant 42% decrease in its price during that month.

Currently, the price of WIF stands at $1.77 following a 4% decrease over the past day. This persistent downward trend has resulted in what is known as a “death cross” on the daily chart for this memecoin.

Analyzing dogwifhat’s death cross

The “death cross” signal was triggered when the 50-day moving average, which was around $2.50, dropped beneath the 200-day moving average that was hovering slightly above at $2.55.

According to this signal, it appears that the price of dogwifhat might be starting a prolonged downward trend, potentially causing the price to decrease further.

The graph shows that a “death cross” has appeared above the current value of WIF, indicating that traders might have anticipated the downward trend. But if WIF can’t hold its ground at $1.72 (support level), it could potentially drop to the 1.618 Fibonacci level, which is around $0.31.

The Relative Strength Index (RSI) indicates a rise in selling activity, which is causing the market to decline. Right now, the RSI stands at 32, approaching oversold territory, suggesting that buyers are struggling to match the intensity of sellers. Moreover, the RSI has been creating lower and lower peaks, signaling that the demand for buying is not strong enough to reverse the selling trend.

A heavily bought Relative Strength Index (RSI) often signals an upcoming brief reversal in price movement, heading upwards. But if traders show reluctance to invest, the market might pause and stabilize within its present price range instead.

Long/Short Ratio shows a bullish bias

According to data from Coinglass, a larger proportion of traders on the Binance exchange are opting for long positions over short ones when it comes to trading WIF. In fact, about 83% of traders have taken long positions on this cryptocurrency, which is the highest in almost a month.

Since the funding rates stay favorable, long-term traders are prepared to pay a premium to keep their holdings active.

Even though traders are optimistic about a change in the trend, a large number of long positions may prove to be unsuccessful if a sudden decrease in price happens. Such a drop might initiate a wave of liquidations, leading to a decline in WIF prices as a result.

Can WIF reclaim its spot as a top Solana memecoin?

The decrease in Dogwhati’s price has led to its market value dropping to $1.8 billion, making it the fourth-largest meme coin on Solana network. This change comes after it was surpassed in performance by BONK, AI16Z, and Pudgy Penguins.

Read dogwifhat’s [WIF] Price Prediction 2024–2025

To regain its leading status, WIF must unite and surpass the three highest-ranked Solana-based meme tokens in performance.

This rally will depend on positive market sentiment and conviction among traders.

2025-01-02 07:04

Analyzing dogwifhat’s death cross

Long/Short Ratio shows a bullish bias

Can WIF reclaim its spot as a top Solana memecoin?

Read More