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?
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.
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.
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.
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.
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.
