Following a period of positive market recovery, the cryptocurrency market as a whole has started to encounter selling pressure.
Amidst this market downturn, the well-known Solana [SOL]-based meme coin dogwifhat [WIF] has witnessed a significant decline, with its price dropping by more than 8%.
Declining On-chain Metrics of WIF
Analysis of on-chain data reveals a notable shift in trader and investor sentiment towards bearishness.
Currently, WIF’s Long/Short Ratio stands at 0.87, marking its lowest level since the start of August 2024. This value falling below 1 signifies a bearish sentiment prevailing in the market.
Statistics show that 53.4% of the top WIF traders have taken short positions, while the remaining 46.6% have opted for long positions.
On the flip side, the Open Interest in WIF’s Futures market has seen a decline of 10% within the past 24 hours, indicating a trend where traders are either closing their existing positions or showing hesitation in opening new ones.
Crucial Liquidation Thresholds
Presently, significant liquidation levels are observed around $1.52 on the lower end and $1.637 on the upper end. Traders are deemed to be highly leveraged at these levels, as per Coinglass data.
In case the bearish sentiment persists and WIF’s price plunges to $1.52, it could lead to the liquidation of long positions worth almost $1.36 million.
Conversely, if the sentiment turns positive and the price surges to $1.637, short positions worth approximately $6.13 million may face liquidation.
The data also reflects a pessimistic view on the WIF token, with short sellers expecting the price not to reach $1.637 and being overleveraged at that level.
Furthermore, it suggests that the market is currently dominated by bearish sentiment, hinting at a looming price decrease in the upcoming hours or days.
Price Momentum of WIF
As of now, WIF is trading close to the $1.54 mark, having experienced an 8% price decline over the preceding 24 hours.
During the same period, its trading volume has reduced by 40%, indicating lesser engagement from traders amidst the recent downtrend.
WIF is currently trading below the 200-day Exponential Moving Average (EMA) and is following an ascending channel pattern, with its trajectory pointing towards the lower boundary of the pattern.
Given the historical price trends, there is a strong likelihood that WIF might undergo a 10% price decrease to reach the $1.43 threshold.
This bearish scenario is anticipated to persist as long as WIF continues to trade below the $1.70 level; otherwise, it could be negated.