WIF struggles in a stagnant market: Bearish sentiment looms
The digital currency, dogwifhat [WIF], didn't see the same surge in popularity that meme coins like Pepe [PEPE] and Bonk [BONK] enjoyed recently. WIF was instead caught up in a persistent downtrend on the shorter timelines.
The enthusiasm for acquiring WIF was noticeably low as market speculators remained doubtful about its potential for a rebound. Consequently, those holding dogwifhat are advised to remain patient. The question remains: should they capitalize on the forthcoming price dip, or will there be a turn in their fortunes soon?
A Familiar Hurdle Emerges Yet Again
Over a six-week span, illustrated in purple, WIF's trading activities oscillated between $2.25 and $3.58.
The halfway mark of this range, situated at $2.91, alternately acted as a barrier and a support throughout this period of sideways trading.
The Fibonacci retracement tool, with its pale yellow indicators, pinpointed the $2.57 mark as a pivotal support area, which unfortunately was compromised over the last half-year. This breach maintained the downward trend seen in the longer term charts.
Earlier this month, the bulls' failure to uphold the support at the mid-range level was a clear indicator of the bears gaining the upper hand.
At the time of writing, the RSI lingered below the neutral 50 mark, hinting at a downward momentum, while the CMF stood at -0.16, signaling strong sell-off activities.
For the bulls to neutralize the negative outlook, they need to propel the prices beyond the upper limits of the range and secure that territory as support.
Signs of a Bullish Counter-Movement Emerge
Between May 13th and 19th, there was a slow decline in the prices. On specific days, like the 17th, the Funding Rate rose to +0.01%, and the Open Interest increased even as the prices dipped.
This highlighted that while there was a fresh influx of short sellers, the sentiment wasn't overwhelmingly bearish given the funding rate didn't drop into the negatives. Moreover, during this period, the spot CVD was on a downward trend.
However, a notable shift occurred in the past 48 hours. The spot CVD witnessed a rebound, suggesting a growing demand, and the funding rate experienced a notable increase.
Despite the Open Interest's failed attempt to rise, indicating speculative trades were on pause, the other indicators hinted at the beginnings of a bullish turnaround.
Disclaimer: The content shared herein is for informational purposes only and reflects the author's personal views. It should not be considered as financial, investment, trading, or any other form of advice.
