Dogwifhat (WIF), the fourth-largest memecoin by market cap, is struggling to recover from a sharp decline following the crypto market crash on August 5. The token’s value has plummeted nearly 30% from its August 9 peak of around $1.95, settling at $1.36 as of August 17. This drop signals a potential further decline of up to 48% if current bearish trends continue.
Memecoin Market Trends Contribute to WIF’s Decline
The downturn in Dogwifhat’s price mirrors a broader decline in the memecoin sector. Major memecoins like Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE) have all experienced losses. DOGE, the largest memecoin, has fallen approximately 10% over the past nine days. Dogwifhat’s 30-day return stands at around -42%, surpassing the declines seen in DOGE (-15%) and SHIB (-23.5%).
WIF/USDT daily price chart. Source: TradingView
WIF’s steep drop follows a period of remarkable performance, with a year-to-date gain of about 708%, trailing only Popcat (POPCAT) at 4,570%. Such significant gains likely prompted profit-taking among early investors, increasing selling pressure.
Long Liquidations Amplify Downward Pressure
The recent correction in WIF’s price is exacerbated by a high volume of long liquidations in the futures market. Over the past nine days, long liquidations have totaled $6.932 million, compared to $3.16 million in short liquidations. This suggests that many traders were overly optimistic, leading to forced selling as prices declined, further driving the price down.
Top memecoin tokens daily and weekly performance. Source: Messari
Bearish Head-and-Shoulders Pattern Suggests Potential Further Decline
WIF is currently forming a classic head-and-shoulders (H&S) pattern, a bearish reversal setup. The pattern features three peaks with the middle peak (head) higher than the others (shoulders), set against a common support level (neckline). As of August 17, WIF is attempting to break below this neckline at around $1.46. If successful, the price could fall to approximately $0.725 by September, representing a potential 48% drop from current levels.
Top memecoins year-to-date returns. Source: Messari
However, if WIF reclaims the neckline as support and closes above the $1.48–$1.69 range, the bearish setup may be invalidated, opening the door for a potential price recovery towards the 50-day and 200-day exponential moving averages.
