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3 Reasons Why Dogwifhat Price Is Crashing Today

Published

8 months ago

June 22, 2024

Coin2049 Newsletter

The crypto market has been facing significant volatility, and the Solana meme coin Dogwifhat (WIF) is no exception. Today, the price of Dogwifhat has taken a substantial hit due to several contributing factors. Here are the three primary reasons behind the sharp decline in WIF’s value.

1. Dogwifhat Whale Dump & Fading Investor Interest

One of the most impactful events affecting the WIF price is the massive token dump by a major whale. According to data from Solscan, on June 20, a Dogwifhat whale offloaded a staggering 5.97 million tokens to Binance, valued at $12.1 million. This move significantly intensified the downtrend that had already begun.

Moreover, today, the same whale sold an additional 6.84 million WIF tokens to Binance, worth approximately $11.3 million. These whale offloading further accelerated the downward pressure on the Dogwifhat price. Earlier in the week, another whale dumped about $3.5 million worth of WIF in just a few hours.

This large-scale selling activity has alarmed investors, prompting a broader sell-off. The waning interest in meme coins like Dogwifhat has compounded the problem. In addition, it reflecting a general shift in market sentiment away from speculative investments.

Earlier, the negative perception among investors has led to a reduction in WIF’s open interest across various exchanges. Data from Santiment showed that the total open interest for WIF has fallen to $166.9 million from a previous $180 million. However, the WIF open interest has witnessed a resurgence since then.

Also Read: Dogwifhat Whales Offload $16M Tokens Amid 24% Weekly Dip, Will WIF Price Drop Further?

2. Massive Long Liquidations

Another critical factor contributing to the Dogwifhat price decline is the wave of long liquidations. Over the past 24 hours, long positions worth $1.66 million have been liquidated. This substantial liquidation has accelerated the price drop, as investors are forced to sell their holdings at lower prices to cover their leveraged positions.

Meanwhile, there has been some buying pressure from shorts, with $286,000 in short liquidations and buybacks. However, it has not been enough to balance the dominant selling pressure from longs.

This trend of long liquidations highlights the bearish sentiment in the market. Traders and investors are increasingly cautious, opting to close their long positions rather than opening new short positions. This behavior has greatly contributed to the observed decline in the Dogwifhat price, as the market adjusts to the increased selling pressure.

On the contrary, WIF open interest surged 10.10% to $236.15 million, according to Coinglass data. This indicates that derivatives traders have shown renewed interest in the Solana meme coin, offering a ray of hope in the choppy market trend.

3. Dogwifhat Price Loses The $2 Critical Juncture

The loss of the critical $2 support level has been a significant blow to the WIF price stability. Recently, Dogwifhat fell from $2.6 to $1.75, marking a crucial breach of support. This drop has led to a bearish outlook, with technical indicators pointing to further declines.

Dogwifhat Price Weak Fundamentals, Source: Trading View

Currently, the Relative Strength Index (RSI) on the daily chart for Dogwifhat stands at 31, approaching oversold territory. This suggests that while a reversal or slowdown in the downward movement might be possible, the immediate sentiment remains bearish.

As WIF struggles to maintain its value above key support levels, the potential for further declines becomes more pronounced. As reported by Coingape earlier, if the selling pressure continues, the Dogwifhat price could fall to to the $1.50 level. Moreover, in a worst-case scenario, the price might even plummet to $1.

Also Read: Dogwifhat Price Prediction: As Market Sentiment Wanes, Can WIF Defy Trend To $1?