Dogwifhat (WIF) token price has rallied in the past few weeks

Dogwifhat (WIF) token rose to a high of $1.3142 on Tuesday, up by 335% from its lowest level in April.

Solana meme coins have shown strength in recent weeks, and Dogwifhat (WIF) token price has rallied in tandem with this trend.

Onchain data suggests that this rally may soon stall as more investors take profits.

WIF token rose to a high of $1.3142 on Tuesday, signaling a 335% rebound from its lowest level in April. This rally has pushed its market capitalization above $1.07 billion, making it the fourth-biggest Solana meme coin after Official Trump (TRUMP), Bonk (BONK), and Fartcoin (FARTCOIN).

However, onchain metrics indicate that WIF could soon retreat. One metric to watch is the rising number of tokens on exchanges.

This metric rose 1.67% to 573.80 million, compared to last week's average of 564.35 million. This increase pushed the exchange supply up to 57.20%, compared to last week's average of 56.26%.

Additionally, Nansen data shows that smart money investors have continued reducing their WIF holdings. These investors now hold around 23.5 million tokens, compared to earlier this year when they held over 24 million tokens.

Smart money investors typically exit their positions when they expect a price reversal, drawing upon their experience.

WIF price technical analysis

The daily chart shows that Dogwifhat started a strong downtrend in November when it peaked at $4.80. It bottomed at $0.3027 in April before beginning a slow uptrend, reaching a high of $1.3115 on Tuesday.

The WIF token formed a rounded bottom, a popular bullish continuation sign. It also moved above the 50-day moving average, which is a positive move.

However, there are signs that the token is now highly overbought. The Relative Strength Index has risen above 80, and the two lines of the MACD indicator have crossed and moved to their highest levels since April of last year.

Dogwifhat has also encountered substantial resistance at $1.0815, the lowest swing in August.

Therefore, while the long-term outlook remains bullish, a slight pullback is likely as investors take profits. If that happens, the next level to watch will be the 50% retracement point at $0.6493.