Why Dogwifhat shot 12% higher today

In the crypto meme space, Dogwife (WIF 6.35%) is among the tokens that have attracted the most attention among speculators and investors. This token has grown over 1,500% since its launch in late 2023, which is certainly a decent return for investors in less than a year.

Today, Dogwifhat is up another 12.6% in the last 24 hours as of 2:30 PM ET. Let’s dive into what exactly is driving this token higher today and where it can go from here.

Moving the larger trend

Most risk assets traded lower on Monday as investors again began to price the risk of a much longer upside in various asset classes. Bond yields rose on expectations that rate cuts could come much more slowly than anticipated, forcing analysts and investors to adjust their models accordingly.

Typically, for the highest risk assets like cryptocurrencies (and meme cryptocurrencies are on another level), higher rates tend to lead to less liquidity overall and higher price fluctuations. This is because the use of leverage in the world of crypto trading is on another level and is a key factor that many investors are looking for.

On this front, we have seen roughly three times the amount of short liquidations than long liquidations in the derivatives world, meaning that investors who are short this token are being forced out of that position, driving WIF prices significantly higher. This is a trend that has remained in place since around September 22nd and is one that I think investors are starting to focus on.

Demand for Dogwifhat’s memorable token seems to remain high. As long as this is the case, investors in this speculative token appear to be positioning their portfolios for more growth and holding for now. Of note, WIF appears to be the third most traded token in the crypto world today, which means it’s getting tremendous attention compared to projects that are much bigger and more notable.

Will this rally continue?

Dogwifhat has certainly shown momentum and strong demand from a lot of investors in recent weeks. I can’t tell if this means we’re on the verge of another meme rally, or if this near-term rally will be relatively short-lived. Although I will say, Dogwifhat has outperformed most of his token meme peers and is a very liquid token for a reason.

The crypto market has seen some divergence from other risk assets such as stocks in recent weeks. I will be paying close attention if this trend continues to move forward. But for now, Dogwifhat is definitely a hot commodity in the crypto space, and it’s a sign I’ll be paying more attention to going forward.