As capital rotated into Solana memecoins over the last 24 hours, dogwifhat [WIF] recorded daily gains of 13.14% on the price charts. The timing here is interesting, especially since the Solana memecoin sector also gained by nearly 6%.
WIF benefited greatly from this rotation as its trading volume jumped by 95.16% to $105.8 million over the same period.
What does this mean though？ Well, this might just be evidence of traders developing an appetite for higher-risk ecosystem tokens.
Worth pointing out, however, that the sharp increase in participation did meet some resistance. Hence, the question: Is the rally sustainable？
WIFs rebound runs into familiar hurdle
On the daily chart, dogwifhat [WIF] rebounded from the $0.1758-region towards $0.2157, but buyers failed to push through this resistance. Notably, the barrier capped previous recovery attempts, making another price rejection significant for the short-term structure.
More importantly, the RSI indicator formed a bearish convergence around the 62.85-zone as the price met rejection.
Notably, each recent RSI approach towards this threshold zone aligned with WIF hitting the upper range, before a subsequent price retreat.
At the time of writing, the RSI stood at 58.82, after retreating from the higher 62.85-zone. The repeated convergence between the indicators RSI resistance and price pullbacks could strengthen the possibility of a price correction.
Source: TradingView
WIF‘s resistance struggle alone did not confirm the pullback case though. In fact, the token’s Spot activity and derivatives positioning showed why selling pressure could gain greater influence after the price rally.
Spot activity heats up as sellers take control
According to CryptoQuant, WIFs Spot Volume Bubble Map highlighted intensified activity as traders increasingly participated in the recent move. Also, the 90-day Spot Taker CVD indicator read seller-dominant after the sharp hike in trading activity.
This meant that at press time, aggressive sellers had taken control of the Spot executions as WIF struggled to keep its rally alive.
This imbalance weakened the rally as the trading expanding activity failed to translate into stronger taker-buy demand. Rather, the hike in participation activity coincided with selling as WIF faced a significant technical barrier.
Sustained seller dominance could therefore restrict fresh upside and increase pressure on traders who entered during the rally.
Source: CryptoQuantRising leverage could accelerate the pullback
Finally, the memecoins derivatives market also added another layer of concern as leveraged exposure expanded during the price hike. According to CoinGlass, the Open interest climbed by 11.10% to $85.12 million, suggesting that traders added positions alongside the price recovery.
Meanwhile, Binance top traders maintained a clear bullish bias despite weakening from previous positioning extremes. Specifically, the long accounts represented 60.52% against the shorts at 39.48%, producing a Long/Short Ratio of 1.53.
Thus, this sizeable share of leveraged positioning remains exposed to a reversal as Spot sellers control activity. The developing price correction could pressure these longs and trigger position closures.
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Eventually, such unwinding would create additional selling pressure, potentially accelerating a pullback that initially began in the Spot market.
Source: CoinGlassFinal Summary
- WIFs 13% rally stalled near $0.2157 resistance as Spot sellers maintained control.
- Rising leverage could accelerate the pullback if WIFs long positions start unwinding.