Dogwifhat’s (WIF) price has been approaching $3 for the last few days. Still, the meme coin did not reach this point despite being the highest gainer in the market the previous week.
However, not every part of WIF is seeing an increase. As a result, it could become more challenging for the token to retest $3. Here is how.
The Meme Coin Continues to Face Headwinds
One reason WIF reached an all-time high of $4.85 in March is its Open Interest (OI). In simple terms, OI refers to the sum of the value of contracts opened in the market.
An increase in Open Interest indicates increased capital deployed in the derivatives market. When this happens, net positioning increases as traders aim to profit from bets on predictions. However, a decrease indicates that traders are closing their positions and removing liquidity from the market.
Usually, when OI increases alongside price, it offers strength to the upward direction. But if this does not happen, it becomes difficult for the upswing to continue.
Read More: What Is Dogwifhat (WIF)?
As shown above, WIF’s Open Interest is $122.37 million. This is the lowest point it has reached in almost three months—specifically, since April 30.
If this lingers, WIF’s price may struggle to keep rising. Another indicator that has refrained the meme coin from rising past $3 is connected to the Weighted Sentiment.
As the name implies, Weighted Sentiment measures the average perception market participants have about a cryptocurrency. If it is positive, it means the broader market is bullish, and demand will easily push the price higher.
But for dogwifhat, the sentiment is negative, indicating that the acumen around the meme coin is gloomy. If sustained, demand could be low, and the price could stall around a region or decline.
WIF Price Prediction: Recent Uptrend Begins to Fade
On the daily chart, WIF formed a death cross on June 10, and by June 14, the price had fallen by almost 50%. For context, a death cross occurs when the longer EMA crosses the shorter EMA.
EMA stands for Exponential Moving Average, and it uses price changes to spot trend direction. In WIF’s case, the 20 EMA (blue) slipped below the 50 EMA (yellow) around the mentioned period.
But an 84.22% increase since July 12 ensures that dogwifhat has been able to erase the losses. Since dropping from $2.83 to $2.76, WIF is losing the bullish momentum it had earlier.
This is indicated by the Relative Strength Index (RSI). Previously, the RSI closed at 70.00, but it reversed to 65.87, indicating that buyer strength is weakening. Should this remain the case, the price of WIF could drop to $2.47.
Read More: How To Buy Dogwifhat (WIF) and Everything Else To Know
However, the bearish prediction could be invalidated if the 20 EMA crosses above the 50 EMA. This is because a golden cross pattern (bullish trend) where the shorter EMA rises above the longer EMA will have appeared.
If that happens, WIF’s price could return to $2.78, and in a highly bullish condition, the value could rise to $3.09.
Disclaimer
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