Dogwifhat has been on a tear, and this recent momentum has continued once again today
In the meme crypto space, Dogwifhat (WIF 6.45%) is among the tokens that’s garnered the most attention among speculators and investors. This token has rocketed more than 1,500% since its late-2023 launch, which is certainly a decent return for investors in the span of less than a year.
Today, Dogwifhat is up another 12.6% over the past 24 hours, as of 2:30 p.m. ET. Let’s dive into what’s driving this token higher today, and where it may be headed from here.
Bucking the larger trend
Most risk assets traded lower on Monday, as investors once again began to price in the risk of higher-for-much-longer into various asset classes. Bond yields surged on expectations that rate cuts could come in much slower than anticipated, forcing analysts and investors to adjust their models accordingly.
Typically, for the highest-risk assets such as cryptocurrencies (and meme cryptos are on another level), higher rates tends to lead to less liquidity overall, and greater price swings. That’s because the use of leverage in the world of crypto trading is on another level, and is a key driver many investors watch.
On this front, we saw roughly three times the amount of short liquidations as long liquidations in the derivatives world, meaning investors who are short this token are being forced out of this position, driving prices of WIF markedly higher. This is a trend that’s remained in place since around Sept. 22, and is one I think investors are starting to key in on.
Demand for Dogwifhat’s memorable token appears to remain high. So long as this is the case, investors in this speculative token appear to be positioning their portfolios for more upside and holding for the time being. Of note, WIF appears to be the third most-traded token in the crypto world today, meaning it’s grabbing outsized attention relative to projects that are much larger and more notable.
Will this rally continue?
Dogwifhat has certainly demonstrated some strong momentum and demand from a whole host of investors in recent weeks. I can’t tell if this means we’re on the verge of another meme token rally, or if this short-term surge will be relatively short-lived. Though I will say, Dogwifhat has outperformed most of its meme token peers, and is a highly liquid token for a reason.
The crypto market has seen some divergence from other risk assets such as equities in recent weeks. I’m going to be paying close attention as to whether this trend will continue moving forward. But for now, Dogwifhat is certainly a hot commodity in the crypto space, and it’s a token I’m going to be paying closer attention to moving forward.
Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.