Dogwifhat, the once-famous Solana-based meme token, has had a brutal week, reflecting a broader crypto market correction and elevating questions in regards to the sustainability of the meme token craze.
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Meme coin mania meets market chaos
WIF, the token that powers Dogwifhat, plunged 15% in simply 24 hours. The sharp drop worn out all positive aspects from the latest rally. The sell-off isn’t unique to Dogwifhat. Your complete cryptocurrency market has skilled double-digit losses, with main altcoins equivalent to Ethereum and Cardano feeling the strain.
Analysts pointed to a wide range of components behind the downturn, together with new issues about inflation and up to date sell-offs from the German authorities and defunct cryptocurrency trade Mt. Gox.
The worth is $WIF Because the market fell, it fell 15%.
A whale deposits 900K $WIF($1.64 million) to #Bybit 10 hours in the past, left 974K $WIF($1.76 million). pic.twitter.com/amIkvwKfNG
— Lookonchain (@lookonchain) July 4, 2024
Dogwifhat’s ache is additional amplified by a special sort of whale: giant traders. Blockchain whale monitoring company LookOnChain found {that a} Solana whale dumped 900,000 WIF tokens in a collection of transactions. The sale, which amounted to roughly $1.64 million, undoubtedly contributed to a downward financial spiral.
Derivatives struggle: Bulls are trampled, bears are feasting
Whereas the spot market skilled a massacre, the WIF derivatives market confirmed a wierd mixture of exercise. Transaction quantity surged an astonishing 25%, making Dogwifhat the third hottest meme coin after Dogecoin and Pepe Token. A surge in quantity may point out elevated curiosity, however a better look tells a special story.
Lurking beneath the floor is a brutal battle between bullish and bearish traders. Over $3 million in WIF positions have been liquidated prior to now 24 hours. The liquidation centered on lengthy positions, which means traders who had wager on rising costs have been pressured to promote at a loss when costs plummeted.
Whereas some could view the elevated quantity as an indication of a possible restoration, liquidation information paints a grimmer image – with many longs being trampled by shorts having fun with the market downturn.
Shopping for alternative or silly transfer?
Regardless of the bloodbath, not everybody has misplaced religion in Dogwifhat. The worth collapse has attracted some opportunistic “Solana whales” who view present costs as a sexy entry level. This glimmer of hope hinges on the potential for Dogwifhat regaining its former glory.
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Within the first quarter of 2024, Dogwifhat turned the darling of meme cash. Using on the meme coin craze, its market worth reached US$4 billion and ranked among the many high 30 world cryptocurrencies. Nevertheless, the latest financial downturn is a stark reminder of the inherent volatility of meme cash, which frequently lack the utility or sturdy fundamentals of current cryptocurrencies.
Dogwifhat’s future stays unsure. Whether or not it crawls out of the doghouse or disappears and not using a hint is determined by a number of components, together with broader market tendencies, neighborhood help, and potential developments inside the Dogwifhat ecosystem.
Featured picture from Shutterstock, chart from TradingView
