Dogwifhat (WIF) Set for Comeback as Price Reaches Oversold Area

full version at beincrypto

Dogwifhat (WIF) price drawdown could be coming to an end as the meme coin is seemingly oversold.

The investors could benefit from this potential recovery and also make a comeback to the network.

Dogwifhat May Take Back Its Losses

WIF price hit a multi-month low after falling to $1.6 over the last four weeks. As a result, WIF’s Relative Strength Index (RSI) has entered the oversold zone for the first time in the history of the meme coin.

This significant technical signal suggests that the asset is undervalued and could be primed for a potential recovery.

The RSI being in the oversold zone often indicates that selling pressure has been overextended. Investors might start to view this as a buying opportunity, which could lead to a reversal in WIF’s price trend.

WIF RSI. Source: TradingView

Consequently, it could draw investors back to the crypto asset, benefitting WIF’s Open Interest (OI). OI had been dramatically reduced owing to the recent drawdown. In less than 20 days, it has been slashed in half, dropping from $466 million to $233 million.

This shows that during the decline, investors rather quickly lost hope of a recovery and decided to close their positions in the Futures market. However, with the price potentially recovering, traders could come back to making bets regarding the price action, pulling the OI back up.

WIF Open Interest. Source: Coinglass

WIF Price Prediction: Meme Coin Bounceback Likely

The WIF price has suffered a 60% drawdown over the past month, falling from $3.62 to $1.67 at the time of writing. However, the meme coin seems to be attempting to recover the recently lost profits, bouncing back from $1.52.

If propelled by accumulation from the holders, the meme coin manages to reclaim $2.00 as a support floor, and recovery is possible. This could send the WIF price to $2.36.

WIF Price Analysis. Source: TradingView

But if the breach before $2.00 fails, the altcoin could be subjected to further drawdown. Falling through $1.52 could thus send the crypto asset to $1.21, invalidating the bullish thesis.