Dogwifhat (WIF) has enjoyed a massive rally in recent weeks, soaring by 335% from its April low to hit a peak of $1.3142 on Tuesday. This surge pushed its market cap to over $1.07 billion, making it the fourth-largest Solana meme coin, trailing Official Trump, Bonk, and Fartcoin.

However, on-chain data now suggests that the rally may be losing steam.

According to Nansen, the number of WIF tokens held on exchanges rose by 1.67% in the past week, climbing from 564.35 million to 573.80 million tokens. This increase lifted the overall exchange supply to 57.20%, up from 56.26%, indicating that some investors are cashing in on recent gains.

Additionally, holdings by smart money investors have dropped to 23.5 million, down from 24 million earlier this year, suggesting that experienced traders are exiting positions in anticipation of a potential reversal.

Technical Analysis: WIF Approaching Overbought Territory

Technically, WIF has been on a strong uptrend since it bottomed out at $0.3027 in April. The token formed a rounded bottom pattern, a common bullish indicator, and broke above the 50-day moving average, signaling renewed buying interest.

However, the Relative Strength Index (RSI) has surged above 80, a level considered overbought. Additionally, the MACD indicator shows both its lines at their highest levels since April 2024, indicating a potential reversal.

If the selling pressure continues, the $1.0815 resistance level, representing the August swing low, will be crucial. A breach below this level could trigger a deeper pullback to the 50% Fibonacci retracement at $0.6493.