Dogwifhat, the Solana-based meme coin that was once a high-flying cryptocurrency, has had a brutal week, reflecting a broader crypto market correction and raising questions about the sustainability of the meme coin craze.
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Meme Coin Mania Meets Market Chaos
WIF, the code that powers DogsDogwifhat’s price has dropped by 15% in just 24 hours. This massive drop has erased all gains from the recent recovery rally. The sell-off wasn’t limited to Dogwifhat; the entire crypto market saw a double-digit decline, with major altcoins like Ethereum and Cardano feeling the heat.
Analysts point to a combination of factors behind the decline, including renewed concerns about inflation, a sell-off by the German government and the defunct Mt. Gox cryptocurrency exchange.
price Wave It fell 15% as the market fell.
Whale deposited $900,000 Wave($1.64 million) to #Baybit 10 hours ago, 974 thousand left Wave($1.76 million).https://t.co/qJwlxcWy15 pic.twitter.com/amIkvwKfNG
— Luke Chain (@lookonchain) July 4, 2024
Dogwift’s pain has been compounded by the presence of a different kind of whale: a big investor. Look on ChainA blockchain-powered whale tracking agency has identified a large Solana whale selling 900,000 WIF tokens in a series of transactions. The flash sale, which raised around $1.64 million, undoubtedly contributed to the downward spiral.
Fierce Battle Over Derivatives: Bulls Crush, Bears Celebrate
While the Spot market saw a bloodbath, the WIF derivatives market showed a strange mix of activity. Trading volume surged by a surprising 25%, propelling Dogwifhat to the coveted title of the third most in-demand meme coin after Dogecoin and Peppe Token. This spike in volume could indicate increased interest, but a closer look reveals a different story.
There was a fierce battle between bullish and bearish investors. Over $3 million in WIF positions were liquidated in the last 24 hours. This liquidation primarily targeted long positions, meaning investors who had bet on the price going up were forced to sell at a loss as the price went down.
While some may see the increased volume as a sign of a potential recovery, the liquidation numbers paint a more stark picture – with many bulls being trampled by bears who were feeding off the market’s decline.
Buying opportunity or stupid move?
Despite all the carnage, not everyone has lost faith in DogWatch. The price drop has attracted some opportunistic “Solana whales” who see the current price as an attractive entry point. This ray of hope hinges on whether DogWatch can regain its former glory.
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In Q1 2024, Dogwifhat was a favorite among crypto enthusiasts, riding the crypto craze to a $4 billion market cap and a spot in the top 30 cryptocurrencies globally. However, the recent drop is a stark reminder of the inherent volatility of meme coins, which often lack the utility or strong fundamentals of established cryptocurrencies.
The future of Dogwifhat remains uncertain. Whether it can recover from the slump or fade into obscurity depends on several factors, including broader market trends, community support, and potential developments within the Dogwifhat ecosystem.
Featured image by Shutterstock, chart by TradingView