Dogwifhat Surges 8%, Becomes 3rd Largest Meme Coin

Key Takeaway

• Dogwifhat (WIF) becomes the third-largest meme coin as it crosses the $4 mark, outperforming other categories with an 8% surge.
• Bitcoin remains stable around $70,000; however, trading firms signal potential exhaustion in the crypto market's recent rally.
• Speculation on DOGE's use in a new payment service spikes futures bets to a record $2 billion, indicating high expectations for price volatility.

Meme Coin Mania Continues

The cryptocurrency market has witnessed a significant surge in meme coin trading, with Solana-based dogwifhat (WIF) leading the charge for the second consecutive day. This rally comes as the broader market remains relatively stable ahead of a long weekend in the U.S., Europe, and parts of Asia. Bitcoin (BTC) hovered around the $70,000 million mark during the Asian morning hours on Friday, with minimal change over the past 24 hours. Meanwhile, other major cryptocurrencies such as Ether (ETH), Solana’s SOL, and Cardano’s ADA experienced a slight decline of 1%, whereas Bitcoin Cash (BCH) saw a 4% increase, continuing its rally from Thursday.

Speculation Drives Dogecoin Futures

The meme coin category, as a whole, outperformed other sectors such as decentralized finance and exchange tokens, with an average surge of 8%. This rally was fueled by speculation around Dogecoin (DOGE) potentially being used in an upcoming payment service by social application X, despite no official confirmation from the company. Futures tracking DOGE saw a record jump to $2 billion, indicating a strong expectation of future price volatility with a bias towards long positions. Dog-themed tokens like floki (FLOKI) and WIF capitalized on this speculation, with WIF overtaking pepecoin (PEPE) to become the third-largest meme token by market capitalization.

Caution Amidst the Rally

Despite the excitement surrounding meme coins, some trading firms have expressed concerns over a potential pullback. Singapore-based QCP Capital highlighted signs of exhaustion in the price rally of bitcoin and ether, pointing to skewed ETH risk reversals and elevated funding and forwards. This suggests that while the bullish sentiment remains, caution is advised, especially regarding leverage. Dogecoin’s surge to its highest level since December 2021, driven by bullish sentiment and speculation about its use on the X platform, exemplifies the market's volatility and speculative nature.

Street Views

• QCP Capital (Cautiously Optimistic on Bitcoin and Ether):

  "The price rally has been exponential in Q1, and there are signs of exhaustion... ETH risk reversals are skewed to the downside at -8%, indicating some fear. Funding and forwards remain very elevated, which means that speculators are still paying high prices to keep their leveraged longs. While we remain bullish, we are cautious about leverage."