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Solana-based meme coin dogwifhat (WIF) has noted a 30% uptick over the past week. This surge has been accompanied by growing market volatility, threatening the token’s further rally.
This analysis delves into what token holders should expect as WIF remains at risk of a price swing in either direction.
Dogwifhat Sees Surge in Market Volatility
Dogwifhat’s double-digit price rally has been accompanied by a noticeable uptick in its market volatility, as evidenced by the widening gap of its Bollinger Bands indicator.
The gap between this indicator’s upper and lower bands has gradually widened over the past few days. Typically, when the bands widen, it indicates that prices are moving further away from the average, indicating increased volatility.
Read more: How To Buy Dogwifhat (WIF) and Everything Else To Know
WIF’s rising Average True Range (ATR), which measures its volatility over a specified period, lends credence to the abovementioned position. The indicator has been in an upward trend since September 17 and is at 0.18 as of this writing.
When an asset’s ATR climbs, it typically signals a rise in market volatility. It means that daily price fluctuations are becoming larger, and the market risks experiencing more price swings in the near term.
Dogwifhat Average True Range. Source: TradingView
Moreover, the low volume of new demand for WIF over the past week raises doubts about the sustainability of the current uptrend. Data from holderscan.com shows that only 2,715 new WIF holders, a mere 1.50% increase in new holder count, have been added in the last seven days.
When an asset’s price rises without a corresponding spike in demand, it hints that investors may be driven by speculation or fear of missing out (FOMO). Such uptrends are often prone to sharp reversals.
WIF Price Prediction: Fall Imminent Once Buyers Become Exhausted
WIF’s price may witness a drawback once buyer exhaustion sets in. This may cause it to retest support at $1.96. If this level fails to hold, the meme coin will decline toward its August 5 low of $1.07.
Read more: Dogwifhat (WIF) Price Prediction 2024/2025/2030
However, if speculation continues to drive its upward momentum, WIF’s price could potentially surge by 75%, reaching $4.04 — a level it last traded at on May 29.