Dogwifhat (WIF) Faces Bearish Structure, Traders Eye Selling Opportunities

Traders are currently assessing the optimal strategy for the cryptocurrency dogwifhat (WIF), with some analysts suggesting that selling may be more profitable than buying. Despite recent gains, WIF has been operating under a bearish structure on its daily chart, indicating potential challenges ahead. This bearish trend suggests that traders might benefit from selling their holdings rather than holding or buying more.

The bearish structure on the daily chart for WIF implies that the cryptocurrency is facing significant resistance, which could hinder further price increases. This resistance is a critical factor for traders to consider, as it may limit the potential for short-term gains. The bearish bias on the 1-day chart further supports the notion that selling could be a more prudent strategy at this juncture.

The recent bullish setup for WIF, which hinges on breaking through a key resistance zone, adds another layer of complexity to the trading landscape. While a breakout could signal a shift in market sentiment, the current bearish structure suggests that such a move may not be imminent. Traders will need to closely monitor the resistance zone to determine if a breakout is likely and whether it warrants a change in their trading strategy.

The overall market sentiment for WIF remains cautious, with traders weighing the potential for both short-term gains and long-term challenges. The bearish structure on the daily chart, combined with the resistance zone, indicates that selling may be the more profitable option for traders at this time. However, the possibility of a bullish breakout cannot be entirely ruled out, and traders will need to stay vigilant and adapt their strategies accordingly.

For dogwifhat, the buying pressure in recent days was not strong enough to signal a trend reversal. The memecoin market saw some relief over the past 24 hours of trading. This came after a Bitcoin [BTC] bounce beyond the $82.5k resistance on the 11th of April. dogwifhat [WIF] has rallied 9% in 24 hours, but it still had a bearish outlook on the higher timeframes. The Solana [SOL] -based meme followed SOL’s 18% move higher over the past three days.

Should WIF traders expect the momentum to be sustained over the coming week? Despite the recent gains, dogwifhat labored under a bearish structure on the daily chart, like many other altcoins. The losses in recent weeks were too severe to recover, and traders and investors would be better off looking for selling opportunities. Technical analysis helped narrow down where those opportunities may present themselves.

Highlighted in red, the bearish order block at $0.55 coincided with the 50% Fibonacci retracement level, plotted based on the past six weeks’ downtrend. It also had confluence with the upper Bollinger Band. The A/D indicator saw a bounce in April but could not climb above the recent high set in the third week of March. This showed some buying pressure, but no dominance from them. The CMF was more scathing. It has been below -0.05 for the majority of the past three months. Together, the volume indicators underlined the steady selling pressure and the lack of bullish strength.

Traders can use the $0.5-$0.55 region to sell WIF. The 1-month liquidation heatmap showed that the $0.45-$0.47 region had been filled with short liquidations. After sweeping this level, WIF bulls were able to maintain prices above $0.42, instead of seeing their gains wiped out quickly. The build-up of liquidity around $0.48-$0.5 marked it as a short-term target. Further north, the $0.6 level was the next notable liquidity pocket. Given the confluence of resistances around $0.55 and weak demand, a breakout appeared unlikely.

If WIF can consolidate around $0.46 over the next 24-48 hours, the liquidity around $0.5 would likely grow thicker. This scenario of WIF consolidation over the next day, followed by a price bounce and a bearish reversal thereafter, appeared the most likely short-term outcome. Traders looking to short the memecoin need to watch the $0.5-$0.55 area, as well as the trend of BTC, to determine if selling would be a feasible option or not.