Analysis of 38 Drop in Dogwifhat WIF Price and Its Market Implications
Dogwifhat (WIF) has seen a significant drop in its position among the top 50 cryptocurrencies by market capitalization, falling by 38% over the past week. This decline has been attributed to the selling off of large amounts of WIF tokens by major holders, also known as whales, who have deposited millions of tokens to exchanges. As a result, WIF’s open interest has decreased, reflecting a decreased trader interest, although there has been some recent resurgence.
Long position liquidations worth $1.66 million in the past 24 hours have accelerated the price drop, causing WIF to fall below the critical $2 support level, reaching as low as $1.75. This steep 38% decline in the last week has pushed WIF out of the top 50 cryptocurrencies by market capitalization, marking a significant change in the world of digital assets.
As of June 24, 2024, WIF’s market cap has shrunk to $1.60 billion, a 9% decrease in just 12 hours. This decline has allowed Fantom (FTM) to overtake WIF’s position in the top 50 cryptocurrencies. Despite this setback, Dogwifhat still maintains its position as the fourth-largest memecoin by market cap, trailing behind Pepe (PEPE), which boasts nearly triple WIF’s market cap at $4.57 billion.
The price of WIF has fallen to $1.62, representing a 38% decrease over the past seven days. This sharp decline has caught many investors off guard, especially considering the optimistic predictions made just a few months ago. In March, when WIF hit the $3 mark, some industry figures, including Arthur Hayes, former CEO of BitMEX, had predicted the coin could rally to $10.
The decline in WIF’s price has been attributed to significant sell-offs by large holders, known as “whales” in the crypto community. A major WIF whale deposited 12.66 million tokens (valued at approximately $23.4 million) to the Binance exchange in two separate transactions, indicating an intent to sell and putting downward pressure on the price.
The market’s reaction to these whale movements has been further compounded by a general waning of interest in meme coins, reflected in the reduction of WIF’s open interest across various exchanges. Data from Santiment showed that the total open interest for WIF had fallen to $166.9 million from a previous $180 million, though it has since shown some signs of resurgence.
Another contributing factor to WIF’s price decline is the wave of long position liquidations. Over a 24-hour period, long positions worth $1.66 million were liquidated, forcing investors to sell their holdings at lower prices to cover leveraged positions. While there has been some buying pressure from shorts, with $286,000 in short liquidations and buybacks, it hasn’t been sufficient to counterbalance the dominant selling pressure.
From a technical analysis perspective, WIF’s price action has been particularly bearish. The loss of the critical $2 support level has been a significant blow to price stability, with technical indicators pointing to the possibility of further declines. The Relative Strength Index (RSI) on the daily chart for Dogwifhat stands at 31, approaching oversold territory.
While this suggests that a reversal or slowdown in the downward movement might be possible, the immediate sentiment remains bearish. Some analysts suggest that if the selling pressure continues, the Dogwifhat price could fall to the $1.50 level, or in a worst-case scenario, even plummet to $1.
