Dogwifhat, the once-high-flying Solana-based meme coin, suffered a brutal week, mirroring a broader crypto market correction and raising questions on the sustainability of the meme coin craze.
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Meme Coin Mania Meets Market Mayhem
WIF, the token powering Dogwifhat, saw its price plummet 15% in only 24 hours. This dramatic drop erased all of the gains from a recent rebound rally. The sell-off wasn’t isolated to Dogwifhat; your complete crypto market experienced a double-digit tumble, with major altcoins like Ethereum and Cardano feeling the warmth.
Analysts point to a mix of things behind the downturn, including renewed concerns about inflation and a recent sell-off by the German government and Mt. Gox, a defunct cryptocurrency exchange.
The value of $WIF dropped 15% because the market fell.
A whale deposited 900K $WIF($1.64M) to #Bybit 10 hours ago, leaving 974K $WIF($1.76M).https://t.co/qJwlxcWy15 pic.twitter.com/amIkvwKfNG
— Lookonchain (@lookonchain) July 4, 2024
The pain for Dogwifhat was further amplified by a whale of a unique kind: a big investor. LookOnChain, a blockchain whale tracking agency, identified a significant Solana whale dumping 900,000 WIF tokens in a series of transactions. This fireplace sale, amounting to roughly $1.64 million, undoubtedly contributed to the downward spiral.
Dogfight On Derivatives: Bulls Trampled, Bears Feast
While the Spot market witnessed a bloodbath, the WIF derivatives market displayed a curious mixture of activity. Trading volume surged by a surprising 25%, propelling Dogwifhat to the coveted title of third most-demanded meme coin behind Dogecoin and Pepe Token. This surge in volume might suggest increased interest, but a better look reveals a unique story.
Lurking beneath the surface was a brutal battle between bullish and bearish investors. Greater than $3 million in WIF positions were liquidated within the last 24 hours. This liquidation primarily targeted long positions, meaning investors who bet on the worth going up were forced to sell at a loss as the worth plummeted.
WIF market cap currently at $1.9 billion. Chart: TradingView
While some might see the increased volume as an indication of potential revival, the liquidation figures paint a starker picture – many bulls got trampled by the bears feasting in the marketplace downturn.
A Buying Opportunity Or A Boneheaded Move?
Despite the carnage, not everyone has lost faith in Dogwifhat. The plummeting price has attracted some opportunistic “Solana whales” who view the present price as a beautiful entry point. This glimmer of hope hinges on the chance that Dogwifhat can recapture its past glory.
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In Q1 2024, Dogwifhat was a meme coin darling, riding the wave of the meme coin craze to a $4 billion market cap and a spot in the highest 30 global crypto rankings. Nonetheless, the recent downturn serves as a stark reminder of the inherent volatility of meme coins, which regularly lack the utility or strong fundamentals of established cryptocurrencies.
The long run of Dogwifhat stays uncertain. Whether it could possibly claw its way back from the doghouse or fade into obscurity is dependent upon several aspects, including broader market trends, community support, and potential developments throughout the Dogwifhat ecosystem.
Featured image from Shutterstock, chart from TradingView