The crypto market has been quite volatile of late and the Solana meme coin Dogwifhat isn’t left out. This week, the price of Dogwifhat has taken an enormous drop due to several contributing factors.
So, let’s get into the topic.
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Top 3 Factors why Dogwifhat Price is Falling
Here are 3 main reasons behind the sharp fall in WIF’s value.
Waning Interest of Investors and Dogwifhat Whales Dump
1. Waning Interest of Investors and Dogwifhat Whale Dump:
Events that have the greatest effect on the WIF price include a massive token dump by a major whale. Based on Solscan data, on 20 June, a Dogwifhat whale dumped 5.97 million tokens to Binance for $12.1 million. This only served to strengthen the downtrend that had started much earlier.
In addition, the whale sold about 6.84 million WIF tokens to Binance, worth roughly $11.3 million. Such continued whale offloading accelerated further the downward pressure on the Dogwifhat price. Earlier in the week, another whale dumped around $3.5 million worth of WIF in just a few hours.
This large-scale selling activity has spooked investors, sparking a far wider sell-off. Fading interest in meme coins like Dogwifhat has further added to the woes. It has also signaled a broader trend: market sentiment has turned away from the speculative bets.
The negative sentiment among investors earlier caused a decrease in WIF’s open interest across different exchanges. Santiment data showed the total open interest for WIF to be $166.9 million; previously, it was $180 million.
Massive Long Liquidations
2. Massive Long Liquidations:
Another crucial factor causing the decline in Dogwifhat’s price is the wave of long liquidations. In the past hours, long positions amounting to approximately $1.66 million have been liquidated. This huge liquidation accelerated the fall in prices, as investors had to sell their portions at lower prices to cover their leveraged positions.
Meanwhile, there has been implicit buying pressure from shorts, to the tune of $286,000 in short liquidations and buybacks. However, it has not been enough to counteract the dominant selling pressure expressed by longs.
The other factor that points toward the downfall further increasing their sentiment is the trend of long liquidations. Traders and investors are more careful about closing long positions than opening new shorts. This attitude causes a decline in the Dogwifhat price, as it keeps the market adjusting to the selling pressure.
Dogwifhat Price Loses The $2 Critical Juncture
3. Dogwifhat Price Loses The $2 Critical Juncture:
This has been a major undermining factor for WIF price stability, as important $2 support was lost. Recently, the Dogwifhat fell from $2.6 to $1.75 for a critical breach in support. The bearish outlook was called out with this drop, as technical indicators showed further declines.
The Relative Strength Index (RSI) on the daily chart of DogeWifhot already stays at 31, nearing oversold territory. This might point to the possibility of a reversal or slowdown in downward movement, but it presents very bearish sentiment in the short run.
As WIF struggles to stay above these key support levels, the possibility of further declines is not ruled out. As Coingape reported earlier, if selling pressure continues to mount, then DogeWifhat price will drop to the $1.50 level. Furthermore, in a worst-case scenario, the price might even hit to $1.
Potential for Consolidation and Long-Term Opportunities [updated]
Even after the recent price fall, Dogewifihats are showing signs of probable range-bound movement that can eventually lead to a good buying opportunity from a long-term perspective. The coin could consolidate between $1.95 to $3.26 levels with a potential sweep of the range low of $1.95 before bottoming out and triggering a reversal.
This could be close to an ideal dollar-cost averaging approach for long-term investors from $1.95 to $1.50, as often both range-bound movement and bottom reversal patterns are accompanied by manipulation moves that push the altcoin below the consolidation range. Placing stink bids below $1.50 could also be a good approach, especially if the crypto markets undergo a volatile crash.
Conclusion
The recent drop in the price of Dogwifhat spells out what everybody should already know: that meme coins are really volatile. From whale selloffs and fading investor interest to broader market uncertainty, there was a list of factors that brought about this huge drop. Piecing together the pieces of hope left in an extremely uncertain future, Dogwifhat will require magic in the form of regaining investor confidence through its robust community and probably some exceptional features or utilities above its meme status.
For now, if you do decide to invest in Dogwifhat, remember to carefully do your research and understand the risks involved; only invest what you can afford to lose. The cryptocurrency market is ever-changing, and responsible investment strategies come to the fore.
