TLDR
- Dogwifhat (WIF) has dropped out of the top 50 cryptocurrencies by market capitalization, falling 38% over the past week.
- The price decline has been attributed to whale sell-offs, with large holders depositing millions of WIF tokens to exchanges.
- WIF’s open interest has decreased, indicating reduced trader interest, though it has shown some recent resurgence.
- Long position liquidations worth $1.66 million in the past 24 hours have accelerated the price drop.
- WIF has fallen below the critical $2 support level, reaching as low as $1.75.
Solana-based memecoin Dogwifhat (WIF) has experienced a steep 38% decline over the past week. This dramatic fall has pushed WIF out of the top 50 cryptocurrencies by market capitalization, marking a notable shift in the volatile world of digital assets.
As of June 24, 2024, Dogwifhat’s market cap has shrunk to $1.60 billion, a 9% decrease in just 12 hours. This decline allowed Fantom (FTM) to overtake WIF’s position in the top 50 cryptocurrencies. Despite the setback, Dogwifhat 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 hat stays on while I count to $10.
LFG fam are you $WIF me? pic.twitter.com/HhaCAygObV
— Arthur Hayes (@CryptoHayes) March 14, 2024
Several factors have contributed to WIF’s current predicament. One of the primary reasons appears to be significant sell-offs by large holders, commonly referred to as “whales” in the crypto community.
According to blockchain data, a major WIF whale deposited 12.66 million tokens (valued at approximately $23.4 million) to the Binance exchange in two separate transactions. This substantial deposit, likely indicating an intent to sell, has put downward pressure on the price.
The whale activity didn’t stop there. On June 20, another large holder offloaded 5.97 million WIF tokens to Binance, worth $12.1 million at the time. The same whale followed up with an additional sale of 6.84 million tokens, valued at about $11.3 million. These large-scale sell-offs have not only directly impacted the price but have also shaken investor confidence, prompting a broader sell-off.
The market’s reaction to these whale movements has been further compounded by a general waning of interest in meme coins. This shift in sentiment is 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 factor contributing 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. WIF has fallen from $2.6 to as low as $1.75, marking a crucial breach of support. This drop has led to a bearish outlook, 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.
