Dogwifhat (WIF), a meme coin from Solana, is one example of the extreme volatility the cryptocurrency industry has been experiencing. Due to multiple factors, Dogwifhat’s price has dropped significantly in the current market. These are the leading causes of the precipitous drop in WIF’s value.
1. Investor interest is waning as the Dogwifhat Whale Dump
The enormous token dump by a significant whale is one of the most significant occurrences influencing the WIF price. On June 20, a Dogwifhat whale offloaded an incredible 5.97 million tokens to Binance, valued at $12.1 million, according to data from Solscan. This action significantly accelerated the downward trend that was already underway.
Additionally, the whale sold Binance an extra 6.84 million WIF tokens today for an estimated $11.3 million. These whale offloading further hastened Dogwifhat’s price decline. Another whale earlier in the week unloaded WIF worth roughly $3.5 million in a matter of hours.
Investors are concerned about this massive selling activity, which has caused a broader sell-off. The issue has been made worse by the declining demand for meme coins like Dogwifhat. Furthermore, it reflects a wider movement in market attitude away from riskier investments.
WIF’s open interest has decreased on several exchanges due to investors’ unfavourable views. Sentiment data revealed that WIF’s total open interest dropped from $180 million to $166.9 million. However, since then, there has been a rise in the WIF open interest.
2. Enormous Prolonged Liquidations
The spate of protracted liquidations is a significant additional element driving down Dogwifhat prices. In the last 24 hours, $1.66 million worth of long positions have been liquidated. Investors’ need to sell their holdings at lower prices to cover their leveraged positions has hastened the price decline.
In the meantime, short liquidations and buybacks totalling $286,000 have created some purchasing pressure. However, it hasn’t been sufficient to counteract the overwhelming selling pressure coming from longs.
The protracted liquidations pattern emphasizes the market’s pessimistic outlook. Investors and traders are becoming more circumspect, choosing to liquidate their long holdings rather than take up new short positions. As the market reacts to the increasing selling pressure, this conduct has played a significant role in the observed fall in the price of Dogwifhat.
Conversely, Coinglass data shows that WIF open interest increased by 10.10% to $236.15 million. This suggests that derivatives traders have rekindled their interest in the Solana meme coin, providing a glimmer of hope amidst the turbulent market trend.
3. Dogwifhat Price Drops Below The $2 Crucial Point
The stability of the WIF price has taken a severe hit with the loss of the crucial $2 support level. Recently, Dogwifhat had a significant loss of support, dropping from $2.6 to $1.75. An opposing view has resulted from this decline, with technical indicators suggesting more declines.
As of right now, Dogwifhat’s daily chart’s Relative Strength Index (RSI) is 31, close to the oversold zone. This implies that the current sentiment is still negative, even though a reversal or slowing in the downward trend may be feasible.
There is a greater chance of future drops as WIF tries to keep its value above critical support levels. As stated by Coingape, the price of Dogwifhat may drop to $1.50 if the selling pressure persists. Furthermore, the cost may drop to just $1 in the worst situation.
