DogWifHat (WIF) draws in volume as other assets slide
DogWifHat (WIF) is mopping up any spare liquidity while other coins and tokens keep sliding. WIF achieved one of its highest volumes mid-week after recovering from Monday’s crash.
DogWifHat (WIF) once again proved its mettle as a community asset with strong support. WIF returned to $1.70 after briefly dipping under $1. WIF reflected the shift to the ‘big five’ top assets, which take up to 80% of the available liquidity. Among altcoins, traders seek the ones most capable of a fast recovery, often sending funds to the top meme tokens.
WIF still feels the selling pressure, but the trend may shift into net buying for the first time in two weeks. Decentralized trading data shows WIF has slightly more sellers than buyers, on a liquidity pool with more than $15M value locked. Raydium currently carries smaller trades from ‘shrimp’ and mid-range traders.
Most of the WIF activity is still on centralized exchanges, and this is the main reason why WIF is able to muster volumes and recover quickly. Around 39% of all WIF volume is concentrated in one Binance trading pair against USDT, inviting immediate buying. During the recent price recovery, WIF reached the volumes of leading token DOGE, which still carries more than $900M in daily trades.
WIF also depends on Bybit, Kraken, and Gate.IO. As of August 8, wallet clusters of private owners are rare, with only one high-volume wallet carrying 0.6% of the supply. WIF is already too large and liquid to be swayed by insider grouping on decentralized markets.
Highest volume outside the big three.
The chosen one. pic.twitter.com/Sip4fLjd4a
— Bitforce (@BitforceSaga) August 7, 2024
WIF remains risky, but entered buying zone
The main premise of WIF is ‘hat stays on’, a shorthand for holding through turbulence. Despite this, whales sold WIF to lock in profits, after buying at a low price at the end of 2023.
New WIF buyers reappeared at levels under $2, contributing to the peak liquidity. However, the recent recovery is also seen as a potential ‘dead cat bounce’.
In the past week, a total of $1.59B of WIF flowed into Binance, suggesting potential selling on the spot market.
Meme tokens are quick to react, but attacking new price levels takes longer. The DogWifHat community expects a recovery to $2 soon and keeps up the narrative of a price hike to $10. WIF may not get to that level without corrections along the way, but the optimism is enough to boost inflows ahead of other altcoins.
Buying meme tokens is also a sign of traders cycling between the currently trending assets. WIF sees inflows while PEPE, BONK and SHIB are currently sold off. The meme token market as a whole took losses, with value sinking under $40B.
The meme token space is still up 100% from March onward, surpassing even the listings of utility tokens. The presence of communities and whale buyers allows traders to shift between the leading meme assets for the best liquidity conditions.
$WIF is close to the top of dead cat bounce.
Still can get to the zone marked yellow with middle around ~1.88 but there I'd start looking for a short again and buy back around ~1.48 pic.twitter.com/E8COTmKjx8
— Zen (@WiseAnalyze) August 7, 2024
WIF traders turn to long positions
During the August 5 correction, markets mostly shed their derivative positions. WIF is now building up its long position again, with a rapid expansion in longs.
The long/short ratio based on Binance trading data expanded from recent lows, though still remaining at a low range. WIF trading is more cautious, though longs are still more than 64% of all positions.
At the same time, Binance funding rates went negative on stablecoin-margin pairs. WIF went through $1.3M short liquidations in the past 24 hours and $1.6M longs liquidations. The derivative markets, however, do not reflect the holding of actual tokens, or additional spot buying.
WIF also went through the most notable funding rate turbulence during this week’s selling. The meme token had three episodes of negative funding in the past week, going through the most volatile period in its trading history.
The recent WIF recovery also sets the pace for other assets, expecting inflows to other narratives like POPCAT, MEW or PONKE. In the past week, NPC and NEIRO also rallied among trading tokens. WIF currently sits at the intersection between mid-range and well-established memes, though it has shown capabilities to compete with SHIB and DOGE trading.
Cryptopolitan reporting by Hristina Vasileva
