Dogwifhat (WIF), a memecoin on Solana, has gained 15% in the past 24 hours, peaking at $1.98 on September 24. This recovery comes after WIF’s price fell 60% from its all-time high of $4.85 six months ago.
Data from We Markets Pro and TradingView shows WIF has rallied from a low of $1.44 on September 18, climbing 37% to trade at $1.96 on September 24.
Compared to the total memecoin market capitalization, it increased by 0.33% to $2.3 trillion, with most major memecoins by market capitalization recording gains on September 24, according to data from CoinGecko.
Sustainable recovery or spike?
Many crypto traders expect Dogwifhat to continue its current bullish momentum to make a solid recovery to its all-time high.
“$WIF is slowly climbing, and we have been quietly accumulating it since last month,” altcoin expert Sjuul wrote on X on September 24.
Meanwhile, technical analyst Crypto Jobs believes that WIF price is breaking out of a 180-day falling wedge pattern, with key resistance levels at $1.98 and $2.
The falling wedge resistance at $1.75 is acting as short-term support for the memecoin. The relative strength index rose from 53 to 66 from September 22 to 23, indicating that buyers are dominating the market.
Notably, WIF’s latest rally has seen it break through key support levels, including the 50-day, 200-day, and 100-day EMAs at $1.70, $1.80, and $1.85, respectively. A surge in buying from these support areas would push WIF towards the current chart pattern’s bullish price target of $2.55.
Meanwhile, futures traders are skeptical about a quick recovery, with $10.91 million in short positions at risk if prices recover to $2.02. A further 10% drop to $1.80 would wipe out $13.63 million in long positions.
Rising open interest supports WIF's rally
Dogwifhat's price surge on September 24 came after a significant increase in open interest (OI).
Open interest is an important indicator that traders and analysts use to gauge market sentiment and predict future price movements.
WIF's OI increased to $315.95 million on September 24, up about 30.45% from $232.82 million the day before on September 23, according to CoinGlass data.
Additional data from Coinglass shows increased demand for leveraged long positions in WIF in recent days, as indicated by the perpetual futures funding rate.
Note that the current rate of 0.0073% per eight hours translates to a cost of 0.05% over a seven-day period, which is negligible for traders building futures positions. Typically, when there is an imbalance due to over-optimism, this rate can easily exceed 1% per week in the next few days.
