Dogwifhat (WIF) has doubled its price in the past seven days. As of this writing, the meme coin exchanged hands at $3.45, having grown by 22% in the last week.
An assessment of the coin’s price movements on a 3-day chart revealed that it has trended within a horizontal channel pattern since April 12, witnessing resistance at $3.64 and finding support at $2.32.
Dogwifhat Traders Maintain Bullish Outlook
WIF’s futures open interest has rallied significantly in the last week. At $434 million at the time of press, the meme coin’s futures open interest has surged by 38% in the past seven days.
Dogwifhat Open Interest. Source: Coinglass
WIF’s futures open interest measures the total number of outstanding futures contracts that have not been closed or settled yet. When it surges, it suggests an uptick in the number of traders entering the futures market for that asset and taking positions.
A look at WIF’s funding rate showed that these traders have been taking long positions. As of this writing, it was 0.007%.
Funding rates are used in perpetual futures contracts to ensure the contract price stays close to the spot price. When its value is positive, it suggests a strong demand for long positions.
Dogwifhat Funding Rate. Source: Coinglass
The rise in WIF’s futures open interest and positive funding rate suggests that there is increasing participation in the meme coin’s futures market, with the prevailing bullish sentiment. Its traders are optimistic about the asset’s future price, leading to more long positions being taken.
WIF Price Prediction: Is There a Catch?
Despite the bullish outlook in WIF’s futures market, its spot market participants do not share similar sentiments.
Despite the token’s price surge last week, its Chaikin Money Flow (CMF) trended downward, thereby creating a bearish divergence. The indicator measures money flows into and out of the WIF market.
A bearish divergence occurs when an asset’s price increases while the value of its CMF drops. This means that despite the price rally, the buying volume in the market is not strong enough to sustain the growth. It is a sign of a price reversal or correction in the near future.
Dogwifhat Analysis. Source: TradingView
If selling pressure outweighs buying momentum, WIF’s attempt to cross above the upper line of the horizontal channel may be hindered, forcing its price down to $3.19.
Dogwifhat Analysis. Source: TradingView
However, if the current rally is backed by even more demand for WIF, the meme coin’s price may rally toward $3.68.