The newcomer in the meme coin space, dogwifhat, has seen a notable decline in its open interest amid increased price fluctuations. Data indicates that dogwifhat is down by 40.6% over the past seven days despite a recent 24% price rally. Currently, the WIF coin is trading at $1.42 with a market cap of $1.417 billion.

On August 5, the meme coin plunged to a five-month low of $1.08 as the market faced uncertainty. Following this dip, WIF’s Relative Strength Index (RSI) surged from 26 (oversold zone) to 52 (neutral zone) within a day.

“The decline in open interest suggests traders are adopting a small-risk approach due to market-wide fluctuations.”

According to data from Santiment, the total open interest for WIF dropped from $183.4 million to $141.2 million over the past two days, a level not seen since March 1. This drop in open interest indicates that more traders are opting for lower-risk strategies, which could lead to reduced price volatility for dogwifhat due to fewer liquidations.

Additionally, market intelligence data reveals that the funding rate for WIF across all exchanges has risen from 0.001% to 0.003% over the past 24 hours. This suggests that traders are optimistic about WIF’s price increase.

However, it is important to note that major macroeconomic events can still influence the direction of cryptocurrency markets, regardless of bullish technical and on-chain indicators. For instance, the geopolitical tension between Iran and Israel on August 4 triggered a market-wide downturn.

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