dogwifhat psychological $1 support fails – Don’t expect a recovery just yet
It was possible that a range formation between $0.69 and $0.74 would play out over the next few days.
- The intense selling pressure and bearish momentum of WIF could drive prices to $0.35 in coming weeks.
- The build-up of short liquidations overhead could induce high volatility and cascades in the event of a price bounce.
dogwifhat [WIF] has fallen off a cliff on the price charts. In January, WIF was trading around $1.5, the base of a range that it had previously traded within in September.
The rally in November was fully retraced by the 22nd of December, and southward Fibonacci extension levels were the next targets.
At press time, WIF was trading below the prices from March 2024. The $0.35 region, which had been significant last February, could be the next target.
dogwifhat RSI oversold, but don’t count on a recovery
The OBV made fresh lows during the past two weeks’ losses. The $1 psychological level was defended for a few days toward the end of January, but was quick to capitulate to the sellers.
The $0.75 zone has served as support, but appeared to act as a supply zone over the past two days.
A set of Fibonacci extension levels were plotted based on WIF’s most recent leg downward on the daily chart.
It showed that the 23.6% extension level was at $0.737, and had been turned into a resistance level. The 61.8% extension level at $0.35 was the next target.
The daily RSI had been oversold (below 30) over the past week, but it need not be followed by a price bounce. The liquidation heatmap could give more insights into WIF’s next move.
The 1-week liquidation heatmap underlined the $0.69 and $0.74 levels as the short-term targets. It was possible that a range formation would play out over the next few days.
If the $0.74 level does not see a bearish reversal, the bounce could extend to $0.8.
Realistic or not, here’s WIF’s market cap in BTC’s terms
It was hard to be certain how high a bounce could go, since the heavy losses in recent days have turned the market extremely bearish.
This has set up a large number of short liquidations, whose cascade could push prices higher and induce high volatility.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
