Dogwifhat Becomes Third-Largest Meme Coin as Bitcoin Clings to $70K

Early Friday, WIF briefly touched the $4 mark before retracing its gains, showcasing the heightened volatility within the meme coin sector amidst a market that remained relatively stable.

Meme coins, particularly those led by Solana-based dogwifhat, experienced significant surges, surpassing the performance of other sectors like DeFi and exchange tokens.

The betting activity on DOGE-tracked futures surged to an all-time high of $2 billion, with some trading firms cautioning against a potential pullback in recent price gains given signs of exhaustion in the bitcoin and ether markets.

For the second consecutive day, meme coins, notably Solana-based dogwifhat (WIF), led the market’s momentum while the overall market remained subdued ahead of the extended weekend across the US, Europe, and certain parts of Asia.

During the Asian trading session on Friday, Bitcoin (BTC) remained relatively stable around the $70,000 level, with Ether (ETH), Solana’s SOL, and Cardano’s ADA experiencing minor declines, while Bitcoin Cash (BCH) recorded a notable 4% increase following its rally on Thursday.

The CoinDesk 20, which tracks the largest tokens excluding stablecoins, saw a slight decline of 0.56%.

Data from CoinGecko revealed that meme coins surged by an average of 8%, surpassing more traditional sectors like decentralized finance and exchange tokens.

The rally in meme tokens began on Thursday amid speculation surrounding the potential integration of DOGE into a forthcoming payment service by the social application X, although there has been no official confirmation from the company.

Investors showed increased interest in DOGE-tracked futures, reaching record levels of $2 billion, indicating anticipation of heightened price volatility with a bias towards long positions.

Tokens inspired by dog-themed projects such as floki (FLOKI) and WIF experienced significant gains as a speculative play on dogecoin. WIF notably surpassed pepecoin (PEPE) to become the third-largest meme token by market capitalization, reaching above the $4 threshold on Thursday.

However, despite the bullish sentiment, several trading firms expressed caution regarding potential leverage risks, highlighting signs of exhaustion in the ETH market and elevated funding and forwards rates, suggesting that speculators were paying high premiums to maintain leveraged long positions.

While maintaining a bullish outlook, these firms emphasized the need for careful management of leverage amid the market’s rapid ascent in the first quarter.