The Memecoin sector has rebounded more than 4% as volume increased by 51%, in line with the broader crypto market. The largest memecoins led the rally, with dogwifhat (WIF) gaining 12%, making it one of the top ten gainers in the last 24 hours.
Other memecoins that recorded similar or greater gains were Pepe (PEPE), Fartcoin (FARTCOIN) and SPX6900 (SPX). This pointed to a broader recovery, but what really impacted the price of WIF?
Is leverage behind WIF’s daily rise?
The daily percentage increase was equal to the weekly earnings. The numbers were improving as the rhetoric of classifying Memecoins as “digital collectibles” rather than securities of the SEC and CFTC gained momentum.
Derivatives data showed that the Long/Short Ratio was buyer-dominated as readings were above 1. This showed that traders were buying more than selling; Binance led at 1.3359, followed by OKX at 1.14.
For Top Traders, the Accounts ratio was 1.6151 while the Positions ratio was 1.4804; This shows that the smart money is buying the dogwifhat meme coin along with retail investors.
Additionally, Open Interest (OI), Funding Rates and volume were also increasing. OI jumped from $75 million in volume to $105 million.
The OI Weighted Funding Rate was in the green over the last two days with a reading of 0.0051%. This showed that market leverage was still adjusting as buyers added more risk.
Such a reading suggested that leverage, as well as bullish market structure, could be behind the daily rise in price.
WIF faces resistance at previous high
On the charts, WIF was rising as it respected the ascending trend line that has maintained the price since March 11. This follows a lower high at $0.223, which is the price target if WIF clears the $0.20 zone.
Currently, WIF bulls are struggling to break above $0.20 and some appear to be taking profits. This is clearly seen by the redshift of the Cumulative Volume Delta (CVD).
Net token exchange has decreased from 5.63 million WIF tokens purchased to approximately 1.17 million tokens currently sold.
Interestingly, the Money Flow Index (MFI) showed that capital was still flowing into memecoin even as momentum cooled. MFI reading was 61.
With this in mind, simply staying above the $0.20 zone could put WIF on a path towards $0.223. A recovery of the $0.223-0.230 zone will turn the market structure bullish on the daily chart.
Final Summary
- dogwifhat, long positions increased by 12% with increased leverage in volume, OI and Funding Rates.
- WIF is heading towards $0.23, but this can only happen if it stays above $0.20.
