Worldcoin (WLD) saw modest gains earlier this week as Bitcoin (BTC) and the broader cryptocurrency market experienced an upswing. However, at press time, WLD had lost some of these gains, dropping 0.35% to trade at $1.98. While the price action remains choppy, on-chain metrics reveal that WLD may be on the cusp of a trend reversal.
Whale Activity Spikes
A key factor fueling WLD’s potential for a trend shift is the surge in whale activity. Over a 24-hour period, transactions of more than $100,000 in WLD tokens skyrocketed from 9.98 million to 77.78 million, signaling a strong movement among large holders. With whales owning roughly 84% of WLD’s total supply, their buying activity could prove crucial in pushing WLD out of its bearish trend.
On the one-day chart, the Relative Strength Index (RSI) sits at a neutral level of 50, indicating an equilibrium between buyers and sellers. However, the RSI is trending above its signal line, hinting that bullish momentum might be taking hold. Meanwhile, the Chaikin Money Flow (CMF) is slightly positive at 0.05, reflecting modest buying pressure. For this potential uptrend to solidify, though, additional buying activity is needed. Should this upward trend continue, WLD could face resistance at $2.35, with further upward potential toward a liquidity trap at $2.65.
Price Risks and Support Levels
If bullish momentum falters, WLD could see a downturn toward a crucial support level at $1.58. This level could provide a safety net, though sustained pressure from sellers may weaken it. In such a case, WLD might revisit lower support zones, especially if buying interest fails to intensify.
NVT Ratio and Market Valuation
Worldcoin’s Network Value to Transaction (NVT) ratio, a metric often used to assess asset valuation, has been declining. Currently at its lowest level in three weeks, this indicates that WLD could be undervalued relative to its transaction activity. A declining NVT suggests strong on-chain activity, which could imply that WLD’s price doesn’t yet fully reflect the network’s growing utility. Such an undervaluation could lay the groundwork for future price appreciation if investor sentiment shifts positively.
Also Read: Worldcoin (WLD) Eyes 24% Rally After 16% Drop – Key Levels To Watch For A Bullish Breakout
Despite signs that WLD may be undervalued, derivative traders appear skeptical of a price rebound. The long/short ratio for WLD has remained below 1 for the past three days, indicating that short positions currently outnumber long ones. This trend underscores bearish market sentiment, as traders increasingly bet on WLD’s price decline.
Worldcoin stands at a pivotal point, with conflicting indicators. While increased whale activity and a declining NVT ratio suggest potential upside, bearish sentiment among derivative traders and limited buying pressure could restrain its performance. For now, WLD remains in a delicate balance between bullish potential and bearish risks, with its future trajectory largely hinging on whether whale activity translates into sustained buying momentum. Traders should closely monitor resistance at $2.35 and support at $1.58, as WLD navigates this period of heightened market volatility.
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.
About The Author
