With Bitcoin haemorrhaging yet again on the news of the Mt Gox imminent distribution of $9 billion to creditors in July, the outlook for memecoins is anything but healthy. That said, after its recent big depreciation, $WIF looks like it is coming to the end of its sell-off.
Memecoin niche taking a pounding
The cryptocurrency market is going through times of huge tumult. Bitcoin is in the middle of its bull market and currently it is looking rather precarious. If the bulls do not come out and reverse the current trend soon, there could be another stair stop down.
If Bitcoin remains in a downtrend, the altcoins are generally always going to be in that same downtrend, and in most cases more so. Going even further out on the risk curve, the memecoins have been taking a pounding. Dog Wif Hat (WIF) is certainly no exception.
$WIF downward spiral
A strong favourite when times are good, $WIF has been crashing in the current bad times. From its local top of $4, achieved at the end of May, Wif has been in a downward spiral. The price is currently sitting at $1.61, which marks a 60% decrease since that top.
$WIF upside breakout is more likely
Source: TradingView
Looking at $WIF on the daily time frame it can be seen how that 60% decrease has taken place in a down channel. However, this is a bullish pattern, and it would be more likely than not that $WIF gets back to the top of the channel and breaks to the upside from there.
It might not be all plain sailing, given the band of resistance that starts at $1.95 and stretches to $2.51, but if $WIF can break out of the channel, this could coincide with breaking the first of those resistances.
When confidence returns
Looking further out to the end of the Summer, Bitcoin could potentially overcome its current headwinds. A positive catalyst would not go amiss here. With Bitcoin once more heading strongly to the upside, the memecoins could be off the leash once more, and it would be a strong bet that $WIF would be among the frontrunners.
It’s all a matter of confidence. When this starts returning, the retail participants would likely start to flood back in, and given the previous history of this bull market, the memecoin space could once more head back to the top of the outperforming crypto niches.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
