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Dogwifhat (WIF) Price Plunges to Yearly Low, Facing Make-or-Break Moment

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Victor Olanrewaju
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Key Takeaways

  • Despite hitting $4 in December, WIF’s price has fallen since February 2024.
  • The decline in the value of memecoin seems connected to the dwindling speculative activity around it.
  • Several indicators reveal high selling pressure, signifying that WIF’s downswing is not yet over.

Once the talk of the crypto market, Dogwifhat (WIF), a meme coin that gained massive traction in 2024 with the viral phrase “a dog with a pink hat,” has taken a sharp downturn.

After soaring to a market cap of $4.5 billion around March 2024, WIF has seen its price plummet to $0.79. This represents its lowest point since February 25, 2024. At one point, the token traded close to $5, but today, it’s a shadow of its former self.

With WIF’s price stuck in a downtrend, some traders believe its best days are behind it. But is there still hope for a short-term rebound, or is WIF destined for further decline?

WIF Open Interest Tumbles

One crucial metric that helped WIF reach $4.85 in March 2024 was its Open Interest (OI), which measures speculative activity around a cryptocurrency.

A high OI indicates fresh capital flowing into the market. This influx of liquidity implies strong bullish sentiment and confidence in the asset’s potential upside. Therefore, when the price increases alongside the OI, it indicates that, the value might continue to jump.

For instance, when WIF’s price jumped from $1.91 to $4.19 in November last year, the OI climbed from $300 million to over $600 million.

But as of this writing, the OI has plummeted to $157.58 million. The decline in the Open Interest indicates that net positioning around WIF has decreased.

WIF open interest plunges
WIF Open Interest | Credit: Santiment 

As such, it is likely the memecoin will experience a further decline unless it attracts substantial capital into the derivatives market.

WIF Price Analysis

On the daily chart, the decline has driven the token to slide below the 100-period Exponential Moving Average (EMA). Historically, when the price falls below the EMA, it indicates that the crypto is likely to undergo correction.

As seen below, the price continued to fall whenever WIF dropped below this indicator. Meanwhile, when it rises above it, the value trades higher.

Coupled with the 100 EMA, the Cumulative Volume Delta (CVD), which is the difference between the volume bought and sold, is negative.

WIF price falls below major threshold
WIF/USD Daily Chart | Credit: TradingView 

This indicates that WIF is still facing selling pressure. If this continues, the meme coin’s value might continue to fall, especially as it failed to hold support at $1.50.

Not a Temporary Setback

Further evaluation of the WIF/USD chart shows that, like the price, the On-Balance Volume (OBV) has reached its lowest in nearly a year.

The OBV looks at the trading volume around an asset and uses it to predict the price movement. The higher the OBV, the higher the price increases.

However, in this case, the indicator validated the intense selling pressure that WIF continues to face. Should the memecoin struggle to notch an increase in buying pressure, then the price might drop to $0.63.

On the flip side, with WIF oversold, the trend might reverse to the upside if the token sees a rise in accumulation. In that situation, WIF’s price could climb to $2.25.

WIF price analysis shows lower lows
WIF/USD Daily Chart | Credit: TradingView 

In addition, if demand for the token surges much higher, it could rise as high as $4 and invalidate the bearish bias.

Disclaimer: The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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Victor Olanrewaju

Victor is a reporter at CCN. Currently residing in Lagos, Nigeria, Victor focuses on writing news and providing readers with on-chain and technical analysis. Before he joined CCN, he worked as an analyst at BeInCrypto and AMBCrypto. He published several pieces at these outlets detailing investor behavior and analyzing price action across different cryptocurrencies. Victor holds a Bachelor's degree in Physics from the University of Ibadan. With his background, he finds it seamless to break down technical terms into simpler words while keeping readers engaged.
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