Within a short span of time, Wormhole [W] has witnessed a significant surge in its value. Earlier this week, Bitcoin [BTC] saw a modest increase from $58k to $62k, a 7.8% rise which was overshadowed by Wormhole’s performance.
Over the past three days, W has recorded a substantial gain of 19.39%, outshining BTC. Despite this impressive short-term growth, the overall trend for Wormhole remains bearish.
Assessment of Market Trends and Structure
Since August, W has managed to avoid establishing a new lower low on the daily chart, offering a glimmer of hope for bullish investors. The price range has been hovering between $0.175 and $0.2785, with the $0.2145 level acting as a recent resistance point.
The recent price surge managed to break through this resistance level, leading to a shift in the Directional Movement Index from signaling a strong downtrend to a more neutral stance. Additionally, there has been an uptick in the Chaikin Money Flow (CMF) indicator, with a value of +0.12 indicating a notable increase in capital inflow to the Wormhole market. As a result, a potential move towards the local highs at $0.278 seems probable.
Improvement in Investor Sentiment
During August and the first part of September, the daily chart depicted a bearish trend, reflected in subdued values on the Open Interest chart as speculators opted to remain on the sidelines. However, recent price spikes have spurred bullish sentiment, driving an uptick in Open Interest by $5 million over the last couple of days.
The OI-weighted funding rate has also turned positive following a brief dip into negative territory on September 17th. This shift indicates a growing preference among market participants to adopt long positions in the futures market.
Overall, the outlook for Wormhole appears bullish in the coming days, barring any significant price declines in Bitcoin.
Disclaimer: The information shared in this analysis represents the author’s personal opinion and should not be construed as financial, investment, or trading advice