Once-soaring Solana-based meme coin Dogwifhat had a terrible week, reflecting a wider slump in the cryptocurrency market and casting doubt on the meme coin craze’s long-term viability.
Meme Coin Mania Meets Market Mayhem
The price of WIF, the token that powers Dogwifhat, fell 15% in a single day. The gains from a recent recovery rally were completely obliterated by this sharp decline. Dogwifhat wasn’t the only cryptocurrency to see a sell-off; the whole crypto market saw a double-digit decline, with big altcoins like Ethereum and Cardano feeling the pinch.
Experts attribute the decline to a number of causes, such as resurrected worries about inflation and a recent sell-off by the German government and the now-defunct bitcoin exchange Mt. Gox.
The price of $WIF dropped 15% as 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
An entirely other sort of whale added to Dogwifhat’s suffering: a sizable investor. Blockchain whale monitoring company LookOnChain discovered a large Solana whale that was disposing of 900,000 WIF tokens in a string of transactions. This fire sale, which brought in about $1.64 million, surely accelerated the decline.
Dogfight On Derivatives: Bulls Trampled, Bears Feast
The WIF futures market saw an odd mix of activity, while the Spot market saw a carnage. A startling 25% increase in trading volume propelled Dogwifhat to the coveted third-most-desired meme currency ranking, behind Dogecoin and Pepe Token. A deeper examination reveals a different scenario, despite the fact that this volume jump may indicate increasing interest.
Beneath the surface, there was a bloody conflict between investors who were bullish and pessimistic. The previous day saw the liquidation of WIF bets worth more than $3 million. Since long positions were the main focus of this liquidation, investors who had made money on an increase in price were obliged to sell them at a loss when the price fell.
Although some may see the higher volume as a hint of a possible comeback, the liquidation statistics show a different story: many bulls were crushed by the bears who were taking advantage of the market correction.
A Buying Opportunity Or A Boneheaded Move?
Even all the bloodshed, some people still have hope for Dogwifhat. Some shrewd “Solana whales” have drawn in by the precipitous price decline, seeing the current price as an alluring entry point. This ray of hope depends on Dogwifhat’s ability to relive its former splendour.
Dogwifhat was the darling of meme coins in Q1 2024, riding the wave of the frenzy to a $4 billion market valuation and a spot in the top 30 worldwide crypto rankings. But the recent decline is a clear reminder of meme coins’ intrinsic volatility, which sometimes lacks the usefulness or solid foundations of well-known cryptocurrencies.
Dogwifhat’s future is still up in the air. Its ability to emerge from the doghouse and return to prominence will rely on a number of variables, including as general market trends, community support, and prospective advancements within the Dogwifhat ecosystem.
Featured image from Shutterstock, chart from TradingView