During the election date, the cryptocurrency market surged, with signs of Trump's victory becoming more pronounced, causing Bitcoin [BTC] to skyrocket to an all-time high (ATH). Memecoins surged even more, with dogwifhat [WIF] rising 20% within 24 hours.
As of publication, a long wick has appeared on the daily chart, indicating that the election day rally may cool off. But what will be the next step for one of the top memecoin gems after the election?
The next step for WIF
On the price chart, WIF followed a textbook pullback scenario, retreating at the golden zone of the Fibonacci retracement tool (50%-61.8% Fibonacci level, marked in white). The support zone of $1.2 - $2.0 (white) triggered the latest +20% surge.
As some traders may take profits from the rebound, a cooling off could drag WIF down to $2.245 (38.6% Fibonacci level) or back to the golden zone. Afterwards, the memecoin may continue to rise.
In this scenario, marginalized bulls may seek to re-enter the market at the aforementioned support level.
That is to say, if BTC maintains its bullish momentum, a closing price above $2.5 could accelerate WIF to the October high near $3.
WIF whale exposure
Nevertheless, the rally on election day appears to have been driven by large participants. According to data from Hyblock, whales significantly increased their WIF positions on November 5, as indicated by the whale versus retail delta metric.
This is contrary to the significant risk reduction practices before the election, as they reduced their positions, leading to a decline in WIF. If whales' interest in memecoins continues, the upward momentum could push even further.
The aforementioned bullish outlook has also been supported by a significant liquidation of short positions. As of 12 hours before publication, $1.7 million worth of short positions (betting on a decline in WIF price) were eliminated.
In short, due to the heightened election enthusiasm, shorts seem to have no market advantage at least in the short term. If this is the case, any pullback in WIF could be an excellent buying opportunity if the upward trend continues.
