Over the past two days, Worldcoin [WLD] has surged by 14.32% in trading, yet it remains entrenched within a prolonged downward trend. Meanwhile, Bitcoin [BTC] has also been experiencing a gradual decline in recent months, albeit by a milder 13.5% compared to early April.
In stark contrast, WLD has plummeted by 80.51% since April 1st. Recent trading saw the $2.17 level, a key support point from 2024 prior to the February rally, decisively broken in July.
While a descending wedge pattern seemed to be taking shape, its bullish potential remained limited as the pattern failed to fully materialize.
WLD is Overvalued
To gauge the prospects of Worldcoin investors for a potential recovery, CryptoCrypto conducted an in-depth analysis of on-chain metrics. A confluence of the average coin age and the MVRV ratio yielded a short-term buying indication.
The upward trajectory of the average coin age hinted at accumulation, whereas the negative 30-day MVRV signified short-term holders were witnessing losses. Nevertheless, this signal warrants careful consideration.
A similar buy signal emerged in both early July and early August; however, the prevailing downtrend on a broader time scale continued to assert dominance. The bulls seemed incapable of fueling a substantial upward rally.
The Network Value to Transactions (NVT) ratio based on circulation peaked to a six-month high, suggesting the market value of the network overshadowed the transaction volume, indicative of an overvaluation of the WLD token.
Decline in Network Activity
Between April and July, the metric for daily active addresses displayed recurring peaks on weekdays followed by weekend declines.
Subsequently, the once-steady activity experienced a stark decline at the outset of August and struggled to regain momentum.
During this period, development activity also witnessed a setback but managed to recover to levels seen in July. Nonetheless, the evident drop in overall activity poses a warning signal for long-term investors.