Key Takeaways
Dogwifhat (WIF) has been one of the best-performing large-cap Solana meme coins since Aug. 5. On Sept. 24; its price broke out from a descending wedge pattern to confirm the trend reversal.
WIF has nearly reached a critical Fibonacci resistance area after a 140% increase since the Aug. 5 low. Will it break out or get rejected? Let’s find out!
The Dogwifhat price had fallen under a descending resistance trend line since its all-time high of $4.86 on March 31. The decrease led to a low of $1.07 on Aug. 5.
While the decline caused a breakdown from the $1.50 horizontal area, WIF reclaimed it shortly afterward. After several higher lows, the WIF price broke out from the trend line, reaching a high of $2.75 today, on Oct. 7.
This was an increase of 140% from the Aug. 5 low.
The daily time frame Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are both positive.
The indicators are increasing and above their bullish threshold. Moreover, the bullish divergences that led to the upward movement remain intact.
While a potential bearish divergence is developing in the RSI, it has not been confirmed yet.
The most likely wave count indicates that WIF completed a five-wave upward movement (white), leading to the all-time high price of $4.85 on March 31. The ensuing decline was contained inside a descending wedge, a leading diagonal. The sub-wave count is in black.
If this is the correct count, WIF completed wave A on Aug. 5 and began to increase. So, the increase could be wave B in a longer-term A-B-C structure.
In this possibility, WIF will likely face rejection between the 0.5-0.618 Fibonacci retracement resistance level at $2.97 – $3.41. Then, it could begin wave C to new lows.
Alternatively, a decisive close above this resistance area will suggest that the price has started a new upward movement. The WIF price will increase to a new all-time high in this possibility.
Therefore, the reaction to the $2.97-$3.41 resistance will confirm whether the ongoing increase is a bullish trend reversal or a relief rally.
WIF has increased since Aug. 5, accelerating its increase after a breakout from a descending wedge. However, the price is approaching an important resistance area. Whether it breaks out or gets rejected can help ascertain if the increase will lead to a new all-time high or a lower high.