dogwifhat: What you should do to profit from WIF’s 24% dip
WIF has reclaimed the $0.9 zone as support, and could make a substantial bullish move from this demand zone.
- WIF saw bearish momentum in recent days, but showed signs of beginning to recover.
- The absence of buying volume might give swing traders pause.
dogwifhat [WIF] has begun to recover from the recent setback that knocked its price down from $1.12 to $0.85. This 24% drop occurred over two days, when Bitcoin [BTC] slipped from $108k to $104k at the end of May.
Over the past 24 hours, BTC bounced from $103.8k to $106.5k, a 2.5% move. This gave space for the crypto market to recover some recent losses. At press time, CoinMarketCap data revealed that the memecoin sector rallied 3.1% over the past 24 hours.
This was a good start for WIF. Long-term buyers would be interested in the popular memecoin, and its market structure remained bullish.
The momentum was bearish on the lower timeframes, but traders can look for long positions.
WIF reset offers buyers a chance to re-enter
The 1-day chart showed a bullish swing structure for dogwifhat. It had formed a range in March and April, and at press time, remained above those highs at $0.77. The 20 and 50-day Moving Averages (MA) reflected bullish momentum.
The recent dip almost tested the 50-day MA as support, and has begun to recover. However, the trading volume has been dwindling over the past two weeks.
A lack of buying pressure could induce a stupor and steady price declines.
It was unlikely that this would happen unless Bitcoin faced a more severe correction and fell below $102.8k. WIF traders can use this dip to buy, with a stop-loss below the $0.76 level.
The 4-hour chart showed that the picture was not as rosy as on the 1-day chart. The reduced trading volume in recent days saw the A/D indicator trend downward toward the end of May. This was a characteristic of intense selling pressure.
dogwifhat was forced to fall below a three-week-old range (white) that extended from $0.93 to $1.21. At the time of writing, the MAs signaled that bearish momentum was dominant.
The price was testing the 50-period MA on the H4 chart.
If it can reclaim this MA, a move toward the range high at $1.21 would become more likely. In this scenario, the low-demand zone would be a buying opportunity for swing traders.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
