The dogwifhat (WIF) memecoin saw a bloodbath in price plunge as the broader meme coin market fell drastically after the crypto sell-off picked pace. Though WIF’s prices were removed after rough trading, they still trade in a territory that has made it difficult to access the future direction of the coin.
At press time, the token was at $1.36, recovering and up 4.36%, according to data from CoinMarketCap.
Why did WIF price slump?
As Bankless Times previously reported, the decline in meme coins followed a more significant market sell-off that began last week. Investors’ fears of a recession were stoked by unexpectedly low July jobs statistics, and the tech-heavy Nasdaq Composite saw a correction.
In addition, the Japanese stock market had its biggest one-day sell-off since 1987 on Monday after plunging more than 12% during the previous night and entering a bear market.
The central bank’s decision to hike interest rates on August 2 was the worst day for Japanese bank equities since 2008. This abrupt market fall, which wiped out around $500 billion from the cryptocurrency market’s total value in three days, was the biggest 72-hour loss in almost a year.
Will WIF prices fall again?
WIF’s decline below the 50-day and 200-day Simple Moving Averages (SMAs) has reinforced the coin’s bearish outlook. In addition, the Relative Strength Index (RSI) is declining and trading below the 30-oversold level at 17, indicating strong selling pressure on the asset.
However, the bulls could cause a trend reversal because the RSI indicates that the token’s price is low in the short term. In this scenario, the WIF price may rise back to $2.0 (the 50-day SMA).
However, if the selling pressure increases, WIF may drop even lower than the $0.50 support level. The 200-day SMA is currently crossing below the 50-day SMA, forming a death cross at $2.09 that may encourage more selling by the bears.
Even so, this is a respectable number that puts it squarely against other well-known meme coins like BONK. With a market cap of almost $100 million greater than BONK at the moment, $WIF is clearly performing well in the meme coin industry.
Historically, the $1.21 mark has been a reliable level of support that has often generated positive momentum and sparked price recovery.
