- WIF may be mirroring DOGE’s early 2021 cycle, reigniting hopes for a breakout.
- An AMBCrypto strategy could help make that breakout a reality.
dogwifhat [WIF], dubbed Solana’s mascot, has seen a 14% surge over the past week, trading at $1.74 – double the gains of DOGE in the same period.
Despite pulling back from its March ATH of $4.60, WIF’s rising popularity has analysts speculating on a possible bullish cycle akin to DOGE’s meteoric rise in early 2021.
Uncovering the historic 2021 cycle
Source : Coinalyze
On the daily price chart, DOGE’s parabolic rally in early 2021 propelled it to prominence, surging 1,333% in just 2 days and closing at $0.0459054.
This was followed by a bullish move weeks later, where DOGE skyrocketed 10,351% over 100 days, reaching an ATH of $0.70. Put simply, that rally provided historic gains for profiteers; however, losses ensued after, with DOGE currently trading at $0.1075.
In contrast, WIF has not yet seen a parabolic rally but looks poised for one. If a similar trend develops, WIF could break its ATH by retesting its mid-July cycle, provided it holds support at $1.70.
Adding to the optimism are Bitcoin’s historic patterns, as October has often proven bullish. This could serve as an additional catalyst for the memecoin to break out from its month-long consolidation.
If the trend holds, WIF may be positioned for a significant correction during the first quarter of next year.
If specific conditions align
Typically, holders aim to identify a price bottom to begin accumulating before a surge drives prices higher. In the case of WIF, AMBCrypto observed a similar trend.
As previously mentioned, retesting mid-July resistance is crucial for reversing the trend. Supporting this idea are holders who have increased WIF withdrawals, highlighted by a spike in net outflows reaching $26 million on the day WIF hit its bottom at $1.664.
Source : Coinglass
In short, the necessary condition for a price correction is stakeholders refraining from entering the distribution phase. Keeping a watchful eye on that aspect is crucial.
Meanwhile, speculative trading has seen a sharp decline since early August, moving in tandem with WIF’ price. According to AMBCrypto, a reduction in OI could be a bullish sign, making the price less vulnerable to sudden swings.
As futures traders retreat, control may increasingly shift to the spot market. If holder interest remains strong, the chances of a reversal intensify. Therefore, capitalizing on this trend is crucial for anticipating a bullish move forward.
Spot traders must capitalize on this for a WIF reversal
Three days ago, as bears thwarted another attempt to push WIF near its previous rejection at $1.90, longs retreated, resulting in a significant influx of short positions.
Source : HyblockCapital
While this may not seem bullish, a calculated strategy by spot traders could reset WIF for a breakout. Typically, a slight upward trend forces shorts to close their positions. Since shorts currently dominate, if spot traders continue accumulating, it could trigger massive liquidations.
Read dogwifhat’s [WIF] Price Prediction 2024–2025
In summary, if spot traders enter and bears retreat, a resurgence of crypto longs could push WIF toward the $1.90 range. If this trend holds, the next resistance could be expected near $2.
Overall, given the current market dynamics, the potential for a breakout is clearly present, contingent on traders capitalizing on this strategy.
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