dogwifhat [WIF] sees $1M in long liquidations as price tumbles: What now?

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WIF witnessed a massive decline in price over the last few days, causing a surge in long liquidations.
Market sentiment fell, while other cryptocurrencies gained.

Dogwifhat [WIF] has been the darling memecoin for the cryptocurrency sector since quite some time. With a large number of investors backing up the memecoin, the token witnessed massive growth.

Traders take a hit

However, due to recent price fluctuations, traders have suffered significantly when it has come to WIF’s price action.

Over the last 24 hours, more than $1 million worth of long positions have been liquidated. This has occurred due to the significant price decline that WIF saw during this period.

The price of the memecoin fell by 7.26% and was trading at $2.59 at the time of writing.

This decline wasn’t a momentary correction and was part of a larger trend. Since the beginning of May, the price of WIF had declined.

During this period, the token showcased multiple lows and lower highs, indicative of a bearish trend.

The CMF (Chaikin Money Flow) also fell significantly during this period, implying that the overall flow of money into the token declined.

Coupled with that, the RSI (Relative Strength Index)also fell, indicating that the bullish momentum around WIF had waned materially.

If WIF’s price continues to face this kind of selling pressure, it could move past the $2.4794 level soon.

Source: Trading View

Looking at the Social Volume

Due to this decline in price, traders had turned skeptical. AMBCrypto’s analysis of Coinglass’ data indicated that the percentage of short positions taken by the bears had increased to 52% over the last few days.

The overall sentiment of the traders could further drive down WIF’s price going forward.

Also, AMBCrypto’s examination of Santiment’s data revealed that Social Volume around WIF had declined significantly. This meant that the number of negative comments around the token had surged.

The declining Social Volume coupled with the declining Weighted Sentiment can add significantly high amounts of selling pressure.

Source: Santiment

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What could add insult to injury for holders would be the overall state of the memecoin sector. Over the past week, WIF’s competitors, DOGE, SHIB and FLOKI have seen a positive surge in price.

If this trend continues, WIF could lose significant market share.