YEREVAN (CoinChapter.com) – Betting on the wrong memecoin is common enough. But losing money BECAUSE of a large purchase is twice as painful. As you guessed, the situation with the Dogwifhat (WIF) cryptocurrency involves a significant financial loss for a trader.
This individual reportedly spent close to $9 million to acquire Dogwifhat, a memecoin on the Solana blockchain, in a series of transactions. The transactions included amounts of $6.25 million, $1.78 million, and $893,000.
Low WIF Liquidity = Slippage
However, due to the low liquidity of the token, the large purchase led to a substantial increase in the price of WIF, causing a phenomenon known as slippage. Slippage refers to the difference between the expected price of a trade and the actual executed price.
Did you know? Slippage in trading refers to the difference between the expected price of a transaction and the actual price at which it is executed. This discrepancy often occurs in markets with high volatility or low liquidity. For instance, in a rapidly moving market, a trader might place an order at a certain price, but due to the time it takes to execute the order, the asset’s price might change, leading to a different trade price.
Moreover, slippage can occur in any financial market and affects both buy and sell orders. It is particularly prevalent in cryptocurrency trading, where markets can be exceptionally volatile and liquidity can vary significantly.
In this case, the overexcited buyer ended up purchasing WIF at prices as high as $3 per token, but the price quickly plummeted to around 15 cents, resulting in a loss of over $5.7 million for the ‘lucky’ trader.
This loss has sparked discussions in the cryptocurrency community, with some speculating that the trade could have been a marketing stunt to draw attention to WIF, especially since its prices had been declining in recent weeks. In addition to Dogwifhat, other Solana-based meme coins like Bonk (BONK) have also experienced significant price fluctuations.
WIF Price Near All-Time High
When it comes to memecoins, no one can dare to assume they won’t be successful because of their nonsense nature. Just look at the absurd rallies of PEPE, Shiba Inu (SHIB), or Grandpa Dogecoin (DOGE).
Dogwifhat, conversely, didn’t have a stellar introduction and got boosted by an unfortunate market event. The slippage hoopla took the WIF price to $0.28, only 15% below its all-time high.
Moreover, according to CoinMarketCap, Dogwifhat (WIF) 24-hour rally equaled 128%, and the trading volumes shot above 300% thanks to the large transactions mentioned above. As a result, WIF’s market cap grew to $292 million by 13:00 GMT on Jan 11.
UPDATE:
Additionally, WIF scored a listing on Bybit, an exchange that cold further increase the token’s exposure and attract more traders.
