Having gained traction in its first cycle, dogwifhat [WIF] is now at the forefront of the anticipated “memecoin supercycle” that is expected to last until 2025, generating excitement.

However, despite WIF's recent surge, there are signs of a short-term correction. Global Accounts Long% and WIF prices move in opposite directions, with a correlation of -0.92.

This may indicate that WIF is temporarily overvalued.

The mismatch between traders’ expectations and actual price action suggests that the market is overly optimistic. Traders may be heavily long, expecting WIF prices to rise, but in reality prices fall.

This divergence usually signals a correction or continued bearishness before WIF resumes its upward trajectory.

WIF price trend is in correction phase

In order to assess how low WIF may fall before rebounding, a careful look at price action is crucial, especially for traders eyeing strategic entry points.

At press time, WIF is trading at $2.60, but the formation of a head and shoulders pattern on the 15-minute timeframe suggests that WIF could fall further before bouncing back.

Based on this pattern, WIF could soon approach the $2 level.

Moreover, the Stochastic RSI was below the neutral zone at press time, further supporting the possibility of a brief pullback before a potential rebound.

Despite the declines, buyers have proven resilient, stepping in after each dip, which shows growing interest in WIF and confidence that a rebound is imminent.

Sellers are unwilling to buy

A look at WIF’s open interest (OI), total funding rate, and cumulative volume delta (CVD) confirms that sellers are not exerting significant pressure.

There is no significant passive spot bidding, which means open interest is in favor of WIF. The positive overall forecast funding rate indicates that buyers are paying sellers, which reinforces the bullish sentiment.

The rise in CVD in spot trading has intensified this confluence, suggesting that dogwifhat is about to rebound.

Moreover, the decline in futures CVD also sent another divergence signal. Therefore, an uptrend may emerge soon.

Divergences often provide traders with opportunities to go long, which aligns with the idea that dogwifhat could bounce back after this correction.

With Bitcoin [BTC] hovering around $67,000, bullish sentiment in the broader market could further fuel WIF’s recovery, potentially pushing its price higher and closer to new highs.