- The rising open interest was one of the reasons for its parabolic rally.
- In-depth analysis revealed that WIF’s price could retrace back to its target market capitalization of $6 billion.
It’s been an exciting journey for Dog Hat (WIF), which is now the 29th most valuable cryptocurrency on the market. However, many participants may not know this, but Open Interest (OI) in the derivatives market has been one of the main reasons for the rise of WIF.
OI is the total value of open contracts in the market. At press time, WIF had an OI of $654.01 million, according to CoinGlass data. But one thing AMBCrypto noted was that the value was lower about a month ago.
For example, open interest on February 27 was less than $60 million, which means that the value of the indicator has increased 10 times since then.
From a business perspective, the rise of IoT suggested that buyers were more aggressive than sellers. As a result, large OI supported by large amounts of liquidity helped WIF to boost its activity.
it’s time to calm down
At the time of writing, WIF had a market capitalization of $4.22 billion. However, it doesn’t look like interest in the criminal side of the market will be slowing down any time soon. If so, Memecoin’s valuation could double in the coming weeks.
Furthermore, AMBCrypto acknowledged that OI alone cannot determine price direction. But other actions taken by traders can be looked at to predict where WIF will go next. This time, we consider the financing rate.
According to CoinAlyzer data, the WIF funding rate was 0.067 at the time of this publication. But the estimated rate was 0.078. However, the price of Dogecoin has been falling in the last four hours.
As financing increases and the price falls, the delinquent buyers may no longer believe it and may become bearish. As a result, this could cause WIF to fall below $4.45 in the near term.
Is $6 billion the next target?
On the other hand, if the price surges while the funding rate remains positive, the token price could exceed $5. If that were to happen, Dogecoin’s market capitalization could reach $6 billion.
However, on-chain data provided by Santiment showed that market participants have lowered their expectations for WIF. At the time of writing, weighted sentiment, which tracks positive/negative comments, had fallen to 0.018.
This reduction showed that the rate of optimistic comments about the project had dropped significantly. Like sentiment, social volume around WIF declined, suggesting a decline in searches for Memecoin.
Realistic or not, here’s the WIF market cap in terms of SHIB
If searches for WIF go down, it means demand for the cryptocurrency could also fall. If this were to happen, WIF price could fall below $4.45.
However, a resurgence in buying pressure could cause the price to rise and the market capitalization to skyrocket. But for now, WIF could rank between 25th and 30th, with a market capitalization of less than $10 billion.
This is an automatic translation of our English version.