Dogwifhat’s sharp decline: Why WIF could fall below $1
Gladys Makena
WIF declines by 35% on weekly charts amidst declining open interest.
Analysts predict a further decline to $1.
The cryptocurrency market has experienced extreme volatility over the past months. Over the last seven days, the market has seen all cryptocurrencies experience a massive decline.
For starters, Bitcoin has declined 9.84% to $60,780. BTC’s decline has pushed altcoins to massive sell-off, with Ethereum declining by 9.36% on weekly charts and Solana dropping by 21.09% to $141.
This volatility has hit dogwifhat [WIF] the most, declining by 36% on weekly charts.
Dogwifhat’s market sentiment
Amid the WIF’s decline, the market sentiment is strongly bearish. The analysts have shown their pessimism about the possible reversal, predicting a further decline. For instance, Rehan Rao shared his prediction on X, noting that,
“Dogwifhat (WIF) might drop to $1: Major assets are down, and a whale just sold 14.53M WIF tokens. WIF is currently $1.71 and could fall to $1.40 or $0.90.. Watch for key levels at $1.58 and $1.76.”
According to this analyst, since all major crypto assets are declining, WIF will drop below $1, hitting $0.90. Such a decline would solidify the month-long decline of WIFs.
Source: Market Prophit
Such analysis shows the prevailing market sentiment, with AMBCrypto’s analysis of Market Prophit showing that the market sentiment is bearish.
According to the market prophit, the Crowd Z Score is below zero at -1.05, and the market prophit sentiment is below zero at -0.0118.
WIF Decline amidst low open interest and higher liquidation
Source: Coinglass
Dofwifhat sustained decline arises from increased liquidation for long positions and declining open interest. AMBCrypto’s analysis of Coinglass shows WIF open interest has declined over the past 7 days.
According to Coinglass, WIF’s open interest has declined from $385.98M to $239.2M over the past week. This decline shows investors are closing their positions without opening new ones.
LookonChain reported such an incident with a whale selling WIF after 8 months. They reported that,
“5 wallets(may belong to the same person) sold 14.53M $WIF($24M) .”
Source: X
Additionally, WIF has experienced massive liquidation for long positions, according to Coinglass. Over the past week, long position liquidation has surged from a low of $176k to $2.85M.
When long position liquidation soars, investors are forced out of their positions, thus selling at a loss as they lack the conviction to pay premiums and hold their positions.
Source: Coinglass
What price charts indicate
As of this writing, WIF was trading at $1.55 after an 8.84% decline on daily charts. Amidst the price drop, WIF’s trading volume has also declined by 32.93% to $353.5 million over the last 24 hours.
Source: Tradingview
Therefore, our analysis shows WIF is experiencing a strong downward momentum. For instance, RVGI is below zero at -0.3794, suggesting that closing prices are lower than the opening process.
This confirms that the market is in a downtrend and sellers are dominating the markets, thus resulting in higher selling pressure.
Source: Tradingview
The Awesome Oscillator (AO) was below zero at -0.244, indicating that short-term momentum is weaker than long-term.
Thus, the market is experiencing a strongly bearish trend, and AO confirms the trend is most likely to continue. Equally, the MACD further proves this as it’s below zero at -0.109.
Will WIF drop below $1?
On monthly charts, WIF has experienced a strong downward momentum. Over the past seven days, the memecoin has declined by 35%, and thus, if these conditions prevail, WIF will decline further.
If WIF daily candlesticks are closely below the critical support level at $0.50, the altcoin will decline to the next support level at $1.0.
However, if it retests this level and bounces back, it will repeat the historical cycle from 12 July, when it retested the same support level and surged to $2.82.
