The dogwifhat (WIF) price is taking a hit as investor optimism continues to decline for multiple reasons.
The likely outcome is a further decline in the price of the meme coin as the meme coin craze diminishes.
dogwifhat Investors Step Back
The WIF price has been down by more than 45% in the last three weeks, and it is currently trading at $2.1. The shift in sentiment towards meme coins within the crypto market has negatively impacted dogwifhat, along with other such tokens.
Firstly, despite showing occasional signs of weakening bearish momentum, the Moving Average Convergence Divergence (MACD) indicator continues to signal a bearish crossover for WIF. This crossover suggests that the bearish trend might persist, indicating potential further downside for the asset.
The bearish crossover in the MACD is a key technical signal that often prompts cautious behavior among investors. It indicates that the short-term momentum is underperforming compared to the long-term trend, reinforcing the bearish outlook for WIF. Traders and investors closely watch this technical indicator, as it can often foreshadow further price declines.
WIF MACD. Source: TradingView
Investors have been withdrawing their funds from WIF in response to these bearish signals. Over the past three days, there has been a notable outflow of capital. Open Interest has declined by $80 million from $298 million to $216 million. This significant reduction in Open Interest reflects a lack of confidence among investors and a shift away from WIF.
The decline in Open Interest alongside the bearish MACD crossover underscores the prevailing negative sentiment towards WIF. Investors are evidently concerned about the potential for further losses and are choosing to exit their positions.
WIF Open Interest. Source: Coinglass
This combination of technical and investor behavior highlights the challenges WIF currently faces in the market.
WIF Price Prediction: Lower Lows Likely
While the WIF price is noting a 4% rise at the moment, it will most likely witness a further drawdown. The rising bearishness among investors could pull the meme coin below $2.0 towards $1.8.
As is, the crypto asset is observing a three-month low. If the skepticism among WIF holders continues to rise, the meme coin could slip to change hands at $1.5.
WIF Price Analysis. Source: TradingView
On the other hand, if the WIF price continues its rise, having not broken below the support of $2.0, it could recover its recent losses. Should the meme coin breach the resistance at $2.3, it could enable a further uptick in price, invalidating the bearish thesis.