WIF loses 12% in 24 hours – how do traders understand all this?

• The price of WIF has fallen by more than 10% in the last 24 hours.
• The derivatives market results highlighted important bearish sentiment.

In the last 24 hours alone, the price of Solana-based memecoin Dog Hat (WIF) has dropped by double digits. For the same reason, it is now one of the biggest losers in the market over the aforementioned period, according to CoinMarketCap data.

At the time of writing, the altcoin was valued at $2.69, having lost 12% of its value in 24 hours. During the same period, daily trading volume also decreased by 38%.

WIF Traders Begin to Lose Bullish Confidence

An assessment of WIF market activity has revealed an increase in negative sentiment in recent days. In fact, at the time of this post, Memcoin’s weighted sentiment was -0.546, according to sentiment. A negative value for this indicator highlights that bearish sentiment among WIF market participants outweighs bullish sentiment.

Confirming the bearish trend, the WIF funding rate also turned negative. According to coin glass According to the data, the funding rate for tokens on cryptocurrency exchanges was -0.0009%. This is important as this is the second time the token’s funding rate will be negative since February 8th.

Funding rates are a mechanism used in perpetual futures contracts to ensure that the contract price remains close to the spot price.

The value of an asset’s funding rate is positive when its contract price is higher than its spot price and traders who are long pay a commission to traders who short the asset.

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Instead, it returns a negative value when its contract price is below the spot price, and short traders pay a commission to long traders.

When the funding rate on an asset is so negative, more traders hold short positions. This means that there are more traders waiting for the price of an asset to fall than there are traders buying an asset in hopes of selling it at a higher price.

In addition to the negative funding rate, open interest in WIF futures has also been steadily declining since April 9th. At the time of publication, it was valued at $302.45 million, but it has fallen 41% since then.

Due to the continuous decline in WIF prices over the past week, its long traders have suffered more liquidations than those with short positions. In fact, as of April 26, the liquidation of long positions amounted to $1.7 million, while the amount of forced short positions was “only” $1 million.

This is an automatic translation of our English version.