dogwifhat (WIF) Price Takes to the Bulls but Fails to Note Inflows

full version at beincrypto

dogwifhat (WIF) price had a good run this week, with the meme coin rising by close to 65% to reclaim a monthly high.

This garnered considerable attention from the investors who bet on the crypto asset in the futures market but not so much overall.

dogwifhat Deals With Skepticism

The broader market bullishness has sparked a noticeable increase in WIF price as well as investor participation. This surge in confidence and activity has led to a significant rise in the open interest (OI) for WIF.

Climbing by 64%, the OI has grown from $218 million to $358 million, reflecting the heightened interest and involvement from investors. However, despite this substantial increase in open interest, the inflows, as indicated by the Chaikin Money Flow (CMF), have been underwhelming.

WIF Open Interest. Source: Coinglass

The CMF, a volume-weighted average of accumulation and distribution over a specified period, is a key indicator of market buying and selling pressure. Its current readings suggest that the inflows are not as strong as one might expect, given the rise in OI.

This discrepancy between rising open interest and underwhelming inflows could be a cause for concern. It suggests that while more investors are participating, they may not be committing substantial capital, or there may be a significant amount of buying pressure that offsets the bearishness. This dynamic could potentially counteract the bullish sentiment that has driven the increase in OI.

Given these factors, the potential for a further rise in WIF may be limited. The market’s overall bullishness and increased participation are positive signs, but the lackluster inflows indicated by the CMF highlight underlying weaknesses. Investors should remain cautious and consider the mixed signals before making further commitments.

WIF CMF. Source: TradingView

WIF Price Prediction: Upside Needs to Be Set Aside

WIF price, after a 65% rise, is trading at $2.5 after rising from $1.5 over the past seven days, inching closer to the resistance at $2.7. Flipping this barrier into support is crucial for the meme coin as it could guide a rally to $3.0 and beyond.

This would mark a multi-week high for WIF and help secure the recent rise as well. The aforementioned factors do hint at bullishness, but its sustainability is uncertain.

WIF Price Analysis. Source: TradingView

The reason behind this is the bullishness losing its momentum. As the markets cool down, the crypto asset notes slightly to considerable correction, with the drawdown at times even extending by 5%. Thus, WIF could end up consolidated between $2.75 and $2.36, invalidating the bullish thesis.