Worldcoin (WLD) has taken a beating in recent months, with its price dropping a staggering 58% since early June. But for some investors, this downturn might be a golden opportunity to accumulate. Here’s why:
Oversold Territory Signals Potential Rebound
Technical indicators are flashing a potential buy signal for WLD. The Relative Strength Index (RSI) has dipped into oversold territory, indicating a period of intense selling pressure. This often precedes a price reversal, as the asset becomes undervalued and ripe for a rebound. Notably, this marks the most extreme overselling period in Worldcoin’s history, suggesting a significant correction could be underway.
The Market Value to Realized Value (MVRV) ratio adds another layer of bullish sentiment. This metric compares the current market capitalization to the average price investors paid for their WLD holdings. Currently, WLD’s 30-day MVRV sits at -28%, signifying that investors are experiencing significant losses. Historically, this range has often triggered buying pressure, as investors see it as an opportunity to accumulate at a discount.
Crucial Support Level in Play
While the price decline is concerning, WLD is currently holding above a critical support level of $2.00. This level has held firm since November 2023, and a break below it would mark a new eight-month low. However, if WLD can maintain its position above $2.00, a bounce back to $3.00 is a possibility. A decisive break above $3.00 could fuel a further rally for the altcoin.
The Importance of Watching the Downside
It’s important to acknowledge the risk as well. If WLD falls below the crucial $2.00 support level, the bullish thesis weakens considerably. A further decline from here could send the price plummeting towards $1.00, making recovery significantly more challenging.
Worldcoin’s current situation presents a calculated risk for investors. The oversold technical indicators and historically bullish MVRV levels suggest a potential rebound is on the horizon. However, the price needs to hold above the critical $2.00 support for the bullish case to hold true. Investors considering accumulating WLD during this downturn should carefully weigh the risks and potential rewards before making a decision.
Also Read: Worldcoin & Alchemy Join Forces To Forge “Human-First” Blockchain: World Chain Takes Center Stage
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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