Worldcoin (WLD) investors have endured a rollercoaster ride in recent days. After a rough week with a price drop exceeding 4%, the token experienced a further dip, pushing it back towards its support level. However, analysts remain divided on whether this signifies a deeper downturn or simply a retest of a bullish pattern.
The past week painted a bleak picture for WLD. Its value plummeted over 4%, with over half of that decline occurring within a mere 24 hours. By press time, the token sits at $5.55 with a market capitalization exceeding $1.17 billion. This bearish trend undeniably affected investor sentiment.
Sentiment Dives, But Is a Bullish Bounce Incoming?
Onchain analysis, a cryptocurrency news platform, revealed a decline in positive sentiment towards WLD using data from Santiment. This suggests a potential erosion of investor confidence. However, a recent tweet from popular analyst World Of Charts offers a glimmer of hope. They point out that WLD might be retesting a bull pattern, potentially leading to a surge if support holds. A successful retest could see the token reach $18.
The decline in trading volume alongside the price drop suggests a potentially short-lived bearish trend. However, metrics like the MVRV remain bearish, indicating a decrease in new addresses sending tokens.
Chart Analysis: Reversal or Continuation?
A closer look at the daily chart reveals some interesting details. The Chaikin Money Flow (CMF) and Money Flow Index (MFI) – indicators of value accumulation – suggest a potential trend reversal. Additionally, the price finds support at its 20-day exponential moving average (EMA). Successfully testing this level is often seen as a precursor to a bull run.
Also Read: Worldcoin (WLD): From $3 to $8 in a Week, Can it Hit $13 by end of 2024? (Plus Predictions to 2050)
However, the Relative Strength Index (RSI) throws a wrench into the optimistic outlook. Despite the price drop, the RSI indicates WLD could still experience further devaluation.
The Bottom Line: A Time for Caution
While the possibility of a bullish reversal exists, the current picture for Worldcoin remains unclear. Investors should carefully consider the conflicting technical signals and on-chain metrics before making any investment decisions. Close monitoring of the price action, particularly around the crucial 20-day EMA support level, is vital in the coming days.
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