Earlier today, dogwifhat (WIF) fell below $3 amid a struggling overall cryptocurrency market. However, the price of WIF coin quickly recovered and is currently trading at 3.16 USD.
So does this mean Meme Coin Solana will continue to increase in price? This analysis will consider that possibility.
Dogwifhat Note Buying Pressure Returns
WIF’s rapid recovery can be linked to the rise in the Chaikin Money Flow (CMF) Index. On the daily chart, CMF remains high.
CMF is a technical indicator that evaluates the flow of money into and out of an asset over a certain period of time. It helps evaluate the strength of a trend, the balance between buying and selling pressure, as well as the general sentiment of the market.
A positive CMF index indicates strong buying pressure, while a negative index suggests selling pressure. Therefore, the current indicator on the WIF/USD chart shows that buying pressure is overcoming selling pressure.
If that remains unchanged, the price of the WIF coin could continue to increase. Data from Santiment shows that the funding ratio has remained in positive territory. In this context, the funding rate is the cost of holding an open position in the perpetual contract market.
A positive funding rate shows buyers (longs) paying sellers (shorts), helping futures and spot prices align. Conversely, a negative funding rate means shorts are paying longs, and the average sentiment is bearish.
According to Santiment, WIF’s funding rate has skyrocketed, showing that traders are optimistic about Meme Coin’s recovery. Therefore, if demand increases, the price of WIF could increase and most long positions could be profitable.
WIF Price Analysis: $4 In Sight
On the daily chart, WIF has formed an inverse head and shoulders pattern. This is a chart pattern that suggests a possible downtrend reversal. In contrast to the head-and-shoulders pattern, it consists of three bottoms, of which the middle bottom is the lowest (head) and the two surrounding bottoms will form the shoulders.
Usually this pattern is from a downtrend to an uptrend. As such, it appears that the price of WIF may continue to rise. With this, it is likely that Meme Coin will climb to $4.07.
Conversely, if the CMF index falls below the midpoint, it would suggest selling pressure. In that case, WIF could decline to $2.44.
