Worldcoin [WLD] saw a slight increase in value earlier this week alongside a general upswing in the cryptocurrency market driven by Bitcoin [BTC]. However, WLD has since retraced some of these gains, slipping 0.35% to reach a trading price of $1.98 at the current moment.
Despite the fluctuating price movements, analysis of on-chain data suggests that Worldcoin is approaching a critical juncture where a change in trend is probable.
Surge in Whale Trading Volumes
There has been a noticeable uptick in whale activity associated with Worldcoin. Within a day, the volume of substantial transactions exceeding $100,000 worth of WLD tokens surged from 9.98 million to 77.78 million.
Whale transactions could potentially influence a breakout from the prevailing bearish trends affecting WLD, primarily because whales control 84% of Worldcoin’s total supply.
For a rally in WLD to occur as a consequence of whale activity, these large holders must start accumulating the token. The Relative Strength Index (RSI) on the daily chart currently hovers around 50, indicating a balance of power between buyers and sellers.
Although the RSI line is above the signal line, signaling a boost in bullish momentum, the Chaikin Money Flow (CMF) sits at 0.05, indicating some buying interest. But further buying pressure would be required to reinforce the upward trajectory.
If the bullish momentum persists, the immediate resistance level stands at $2.35. Traders should monitor a potential liquidity trap lying at $2.65, where uncollected liquidity could act as a price magnet pushing values higher.
In the event of a failure in the bullish trend due to insufficient buying pressure, WLD might see a decline towards the support level around $1.58.
Evaluating Worldcoin’s NVT Ratio
The Network Value to Transaction (NVT) ratio suggests that Worldcoin may be undervalued. This ratio has been decreasing, with the latest data indicating the lowest level in three weeks.
A falling NVT ratio indicates heightened on-chain activity related to Worldcoin, a bullish signal for WLD. If network growth isn’t being accurately reflected in the price, it could hint at undervaluation, potentially opening the door to upward movement.
Despite the signs pointing towards undervaluation of WLD, traders dealing in derivatives are still leaning towards short positions over long positions. The long/short ratio has remained below 1 for the past three days, indicating a prevailing bearish sentiment in the market.