dogwifhat [WIF] bulls managed to defend a higher timeframe support zone around the $0.7 demand zone.
In a report made in May, AMBCrypto noted that a breakout past $1.2 was not an immediate buying opportunity. Rather, bulls could wait for $1.26 to be flipped to support.
This came true, especially as Bitcoin [BTC] retraced from $111k in the final week of May and fell 10.2% over the next two weeks. At the time of writing, BTC continued to trade within the $100k-$111k area.
The global liquidity index gave long-term crypto investors good reason to expect the market to move higher, with Bitcoin leading the rally in the coming weeks.
After breaking the range formation in early May, the memecoin has retraced its breakout to retest the fair value gap left behind on the weekly chart.
It should be noted that the retracement of the past month saw reduced weekly trading volume.
The FVG (cyan box) represented a demand zone, and WIF was reacting bullishly. A move beyond $1.39 would represent a bullish market structure on the weekly chart.
However, there was a big obstacle to dogwifhat closer at hand.
The 1-day chart showed a bearish structure. A move beyond $1.07, the high from the 10th of June, would shift the market structure bullishly. However, the momentum was not yet in favor of the WIF bulls.
The RSI straddled the fence with a reading of 50, showing neither bullish nor bearish dominance.
The CMF was at -0.03, unable to clear the +0.05 threshold that would signal sizeable capital inflows and high demand. The Supertrend indicator gave a sell signal.
While traders need not sell right away, and could even bet on long positions, it must be noted that the diminished demand and the bearish daily structure indicated further losses were possible.
Hence, long positions should have tight stop-losses below the $0.7 level.
A move beyond the psychological round number resistance at $1 would give traders a good reason to expect a continued move toward $1.2 and potentially higher, if Bitcoin makes sustained gains and drives the market higher.
