Here’s Why Dogwifhat Lost Over 20% Today
WIF and Dogecoin (DOGE), the most established memecoin, has seen a 16% decline over the past month, while Shiba Inu (SHIB) and Pepe (PEPE) experienced even steeper drops of 25% and 36%, respectively.
Dogwifhat (WIF), a prominent memecoin, has experienced a significant downturn in value, reflecting a broader trend within the memecoin and crypto market. The global concerns lead factors to WIF’s recent decline, its performance relative to other major memecoins, and potential future price movements based on technical analysis.
Over the past week, WIF’s price has fallen by 6.82%, currently sitting 79.14% below its all-time high. This drop is accompanied by a substantial decrease in Open Interest, registering a -30.48 % change, totaling $536.07 million.
The downturn mirrors the struggles faced by other major memecoins. Dogecoin (DOGE), the most established memecoin, has seen a 16% decline over the past month, while Shiba Inu (SHIB) and Pepe (PEPE) experienced even steeper drops of 25% and 36%, respectively.
However, WIF’s performance lags behind its peers, having suffered a 42% decrease over the same 30-day period. This significant underperformance, despite a remarkable 708% year-to-date return before this recent slump, warrants closer examination.
Dogwifhat Futures Market Highlight Reasons for Decline
The Dogwifhat futures market reveals a key contributing factor to this decline. Long liquidations have significantly outweighed short liquidations, with $6.932 million liquidated versus $3.16 million in shorts. The disparity indicates excessive bullish sentiment amongst traders, who anticipated continued price increases following december7. The subsequent price drop triggered margin calls on over-leveraged long positions, leading to automatic liquidations and a self-reinforcing downward price spiral.
Technical analysis further suggests the potential for continued downside risk. WIF currently exhibits a classic head-and-shoulders (H&S) pattern, a bearish reversal formation. The pattern, characterized by three peaks with the middle peak being the highest, and a defined neckline, typically signals a potential price reversal.
On December 8th, the memecoin dogwifhat attempted to break below its H&S neckline, around $1.46. A sustained break below this level would confirm the H&S pattern and likely result in further price depreciation.
However, the situation is not entirely bleak. A successful reclaim of the neckline as support and a break above the accumulation range would invalidate the H&S pattern. In such a scenario, WIF’s price could potentially target its 50-day and 200-day exponential moving averages, indicating a bullish reversal.
