Dogwifhat (WIF) has staged a remarkable recovery in recent weeks, climbing to $1.31 on Tuesday and reclaiming its position as the fourth-largest Solana meme coin with a market capitalization exceeding $1.07 billion. This 335% rally from April lows has aligned with broader strength across the Solana meme coin ecosystem. However, concerning on-chain metrics have emerged that suggest the rally may be approaching exhaustion. Exchange inflows have increased notably, with tokens on exchanges rising 1.67% to 573.80 million in just one week. This pushed the exchange supply ratio to 57.20%, up from 56.26% previously—typically a bearish signal as it indicates more holders are positioning to sell their tokens.
Further evidence of potential reversal comes from Nansen data showing that “smart money” investors—typically experienced traders with strong track records—have been steadily reducing their WIF holdings. These sophisticated investors now hold approximately 23.5 million tokens, down from over 24 million earlier this year. This reduction in smart money positions often precedes market corrections, as these investors typically exit before anticipated price reversals. The technical indicators also present a mixed picture: while WIF has formed a rounded bottom pattern (a bullish continuation sign) and trades above its 50-day moving average, the Relative Strength Index has surged beyond 80, placing the token firmly in overbought territory.
The MACD indicator has also reached its highest levels since April last year, further suggesting overextended conditions. With WIF encountering significant resistance at $1.08 (August’s previous swing low) and technical indicators flashing warning signs, a short-term pullback appears increasingly likely despite positive long-term fundamentals. If this correction materializes, the key support level to watch will be the 50% Fibonacci retracement at $0.65. Traders should note that while WIF has recovered impressively from its all-time low, it remains substantially below its November peak of $4.80, leaving significant room for long-term recovery after any potential near-term correction.
