As October unfolds, investors are reassessing their portfolios and considering whether Worldcoin (WLD) is a worthwhile addition. However, current market sentiment around the token remains cautious, with several key indicators signaling a potential downturn.
Bearish Indicators For Worldcoin
One major red flag for investors is the Market Value to Realized Value (MVRV) Long/Short Difference indicator, which is signaling a bearish outlook for Worldcoin. Typically, when this metric is highly positive, it suggests that long-term holders are in profit, pointing to stability. In contrast, deeply negative values indicate that short-term holders are reaping profits, often leading to heightened selling pressure.
Worldcoin’s MVRV stands at -24%, suggesting that short-term holders are currently seeing gains. This is not a positive sign for the altcoin, as it signals an increased likelihood of these investors cashing out. The tendency of short-term investors to sell quickly raises the possibility of further price declines.
This shift in market sentiment is prompting many investors to reconsider adding WLD to their portfolios. With profit-taking on the rise among short-term holders, Worldcoin may struggle to regain upward momentum in the near term.
Macro Risks Cloud Worldcoin’s Future
Worldcoin’s broader macro momentum also paints a bleak picture. The token’s Sharpe Ratio, which measures risk-adjusted returns, is at its lowest level since the altcoin’s launch. A low Sharpe Ratio indicates that the risks associated with investing in Worldcoin outweigh potential rewards, making it a less appealing option for investors.
This heightened risk environment suggests that WLD could face further losses unless significant bullish catalysts emerge. Investors should be cautious about entering the market under these conditions, as the current trend points to a continued downtrend.
Worldcoin’s price has recently declined by 24%, trading at $1.65. Technical analysis suggests that the token may struggle to break through the $2.00 barrier in the near future. Additionally, WLD is facing resistance at $1.74, and failure to surpass this level could lead to further declines.
Should bearish conditions persist, Worldcoin could drop toward $1.34, the lower limit of its consolidation range between $2.00 and $1.34. This scenario would place further pressure on the token, keeping it off the list of “must-have altcoins” for October.
Also Read: Worldcoin (WLD) Plummets 20% As FTX Estate Plans To Auction 22.3M Tokens At 75% Discount!
A Glimmer of Hope?
Despite these challenges, there is still a possibility for a reversal in Worldcoin’s fortunes. If the token can successfully breach the $1.74 resistance level, it may gain the momentum needed to push beyond $2.00. Should this happen, it would invalidate the current bearish outlook and open the door to a potential price surge toward $2.50.
While Worldcoin has captured investor interest, the current market sentiment is not in its favor. With bearish indicators like the MVRV ratio and a low Sharpe Ratio, WLD appears to be a risky investment for October. Until significant bullish catalysts emerge or key resistance levels are breached, Worldcoin may continue to struggle. Investors are advised to exercise caution before adding WLD to their portfolios, as the risk of further price declines remains high.
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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