WIF Token Faces Potential Downside Risks as Technical Indicators Suggest a Possible Retracement

The WIF token faces potential downside risks as technical indicators suggest a possible retracement. Recent price action shows a rejection near key resistance levels

The WIF token price enjoyed a strong bull run following the recent U.S. elections, surging by nearly 151% to reach $4.83 on Nov. 13. However, the token’s rally seems to have stalled at a crucial resistance level, raising concerns about a potential pullback.

If the downtrend continues, the WIF price could drop to the upper trendline of the ‘ascending triangle’ pattern that the token broke out of recently, losing nearly 18% along the way.

Moreover, if the Dogwifhat token re-enters the pattern, the WIF price could test the token’s ascending trendline support, translating into a 45% drop, reaching nearly $1.99 before recovering.

Bulls would likely try to hold the token above the 0.382 FIB support near $2.6, with the next support level at 0.236 FIB level near the $2.13 price mark.

Meanwhile, the WIF USD pair's breakout from the ascending triangle pattern raised bulls' hopes of an extended bull run.

The pattern occurs when a horizontal resistance line connects swing highs while an ascending trendline links higher swing lows. This setup suggests increasing buying pressure as the price approaches the resistance level.

The significance of this pattern lies in the potential for a breakout. A surge in trading volume as the price nears the resistance level typically confirms the likelihood of a breakout above it.

The ascending triangle formation indicates that buyers are gaining strength, and a successful breakout could lead to further upward momentum for the WIF USD pair. Moreover, the technical setup provides a clear framework for assessing potential price movements in the near term.

In technical analysis, the pattern's price target is calculated by measuring its height and projecting it from the breakout point. For the Dogwifhat token, this calculation suggests a price target near $8.8, a spike of 136% from the current level.

However, the WIF price would need to confirm the breakout for the rally to continue, which seems unlikely given the current Dogwifhat price action.