The WIF crypto, known for its meteoric rise earlier this year, is now grappling with a sharp decline in market position and dwindling investor interest. Data reveals that millions of short positions could face liquidation if WIF experiences a rebound, further adding to the uncertainty surrounding the token.

In the past 30 days, the price of WIF has plummeted by a staggering 45.83%, causing it to drop out of the top 50 cryptocurrencies by market cap. Currently valued at $1.53, WIF's market cap stands at $1.56 billion, with Fantom taking its place in the rankings.

Although the launch of the dogwifhat token garnered significant attention in mid-December 2023, its real rise to stardom occurred in Q1 2024, when its price surged by over 1500% to reach an all-time high of $4.84. However, the anticipated rally to $10 has not materialized, and WIF's subsequent correction has left many traders skeptical about its potential for a comeback.

Analyzing WIF's on-chain status, it becomes apparent that the token's volume has significantly declined. Data from Santiment reveals that its trading volume currently stands at $211.62 million, close to the lowest levels seen since May 13th. This suggests a notable decrease in investor interest and raises concerns about the token's ability to recover from its losses.

However, there is a glimmer of hope for WIF's price if market participants seize the opportunity presented by its discount. A potential rebound is not entirely off the table. Yet, many traders remain unconvinced about WIF's comeback potential. A pseudonymous trader, blockgraze, expressed doubts regarding the accumulation of WIF, citing a lack of evidence from the chart.

In addition to declining market sentiment, traders face substantial risks if WIF experiences a price rebound. According to Coinglass data, a total of 12.89 million short positions could be liquidated if WIF bounces back to $1.78. Conversely, if the WIF crypto price falls to $1.37, nearly 2 million long liquidations may occur, highlighting the volatility and potential losses traders are exposed to.

The broader sentiment surrounding WIF appears discouraging, with the token's Weighted Sentiment hitting a six-month low of -1.15. This indicator reflects online comments about the project, revealing a bearish outlook dominating the conversation. Further decline in sentiment could push WIF's price downwards, potentially dropping it to $1.35. However, extreme negative sentiment can sometimes spur a recovery, in which case the token's value could head towards $2.

Another factor contributing to WIF's uncertain future is the drop in Open Interest (OI) below the $200 million mark. OI represents the sum of outstanding futures contracts in the market, and a decline suggests that traders are closing their positions, further dampening market confidence in WIF.

As WIF struggles to regain its former glory, the possibility of its market cap sliding below the 51st position adds to the skepticism surrounding its future. The crypto community eagerly watches to see if WIF can overcome the challenges ahead or if its decline will continue unabated.

Disclaimer: The above analysis is based on on-chain data and market trends available at the time of writing. Cryptocurrency investments are subject to market risks, and readers should conduct their own research and exercise caution before making any investment decisions.