Dogwifhat ($WIF), a meme coin that caught fire after its Coinbase listing, is now facing a steep decline, dropping 16.5% in the past 24 hours and 25% in the last week.
With its price falling nearly 45% from its November peak, many are questioning whether $WIF is destined to hit rock bottom or if it’s just a temporary pullback.
Reasons for the Decline
Fading Coinbase Hype
WIF surged to $4.83 in November following its listing on Coinbase but has since cooled off. The hype surrounding new exchange listings often drives speculative buying, but prices frequently retrace once the initial excitement fades.
Meme Coin Weakness
The entire meme coin segment has struggled recently. Comparable tokens like Dogecoin (DOGE), Bonk (BONK), and PEPE have also seen double-digit losses, indicating broader market trends rather than WIF-specific issues.
Overbought Conditions
The meteoric rise of 1,400% earlier this year left $WIF in overbought territory. The current decline, with its Relative Strength Index (RSI) approaching oversold levels, suggests a natural market correction rather than a catastrophic collapse.
Positive Indicators
Growing Holder Base
Despite the price drop, the number of $WIF holders has climbed from 189,000 to over 207,000 addresses, according to CoinCarp. This growth signals sustained interest, especially at lower price points where investors may see value.
Binance.US Support
Binance.US began accepting $WIF deposits on December 11, showing support for the meme coin. This move could bolster liquidity and attract more buyers, potentially stabilizing its price in the near term.
Technical Analysis
Critical Support Levels
WIF is hovering near a key trendline support. If it breaks below this, the next critical level is $1.86, which could prevent a deeper slide into the low $1 range. However, if buyers step in at this level, it could signal renewed demand and trigger a price rebound.
RSI Approaching Oversold Territory
The RSI indicates $WIF is nearing oversold levels, which could prompt buying activity. Historically, such levels have preceded price recoveries, suggesting the current decline may be a short-term pullback rather than a long-term downtrend.
Macroeconomic Backdrop
The broader crypto market remains influenced by macroeconomic conditions. With interest rates easing and liquidity improving, the environment still favors speculative assets like $WIF. These factors could help meme coins recover as risk appetite returns to the market.
Conclusion: Pullback or Freefall?
While WIF’s recent price action may appear alarming, it’s essential to consider the broader context. The token remains significantly up for the year, and technical indicators suggest a pullback rather than a complete collapse. However, breaking below key support levels could lead to further losses.
For now, the next few days will be critical in determining whether WIF finds stability or continues its downward slide.
