Why is Solana's Dogwifhat (WIF) memecoin crashing?
WIF price risks declining by another 48% due to the formation of a classic bearish reversal setup.
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 crashes alongside other memecoinsÂ
WIFâs price declines accompany similar downside moves across other top memecoins, namely DogecoinÂ
DOGE
$0.10
, Shiba InuÂ
SHIB
$0.000013
, and PepeÂ
PEPE
$0.000008
. For instance, DOGE, the largest memecoin by market capitalization, has dipped by approximately 10% in the last nine days.
Among the leading memecoins, WIF has experienced more significant losses over weekly and monthly timeframes. For instance, WIFâs 30-day returns are around -42%, far exceeding DOGE (-15%) and SHIB
(-23.5%)
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.
Is Dogwifhat price bottoming out?
WIFâs downside risks remain intact as it forms what appears to be a classic head-and-shoulders (H&S) pattern.Â
An H&S pattern is characterized by forming three consecutive peaks â the middle peak called the head being higher than the other two called shoulders â atop a common support level called the neckline.