Why is Solana's Dogwifhat (WIF) memecoin crashing?

2024-08-23 07:17:30 Primitive Reading

Dogwifhat (WIF), the fourth-largest memecoin by market capitalization, is on the brink of erasing the recovery it achieved after the Aug. 5 crypto market crash. WIF has dropped approximately 30% from its Aug. 9 local top of around $1.95, bringing its price down to $1.36 as of Aug. 17.

WIF/USDT daily price chart. Source: TradingView

WIF crashes alongside other memecoins

WIF’s price declines accompany similar downside moves across other top memecoins, namely Dogecoin, Shiba Inu, and Pepe

. For instance, DOGE, the largest memecoin by market capitalization, has dipped by approximately 10% in the last nine days.

Top memecoin tokens daily and weekly performance. Source: Messari

Among the leading memecoins, WIF has experienced more significant losses over weekly and monthly timeframes. For instance, WIF’s 30-day returns are around -42%, far exceeding DOGE (-15%) and SHIB (-23.5%).

Top memecoins year-to-date returns. Source: Messari

WIF had an exceptional year-to-date performance, with returns reaching approximately 708%, second only to Popcat (POPCAT), another Solana-based token that surged by around 4,570%. Such substantial gains likely attracted profit-taking from early investors, leading to increased selling pressure.

Long liquidations outnumber shorts

Dogwifhat's 30% correction from its Aug. 9 local top coincides with a higher number of long liquidations in the WIF futures market relative to short liquidations.

Over the past nine days, there have been cumulative long liquidations of $6.932 million versus $3.16 million in short liquidations, according to Coinglass data.

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