Worldcoin [WLD] successfully turned the once-resistance level of $2.5 into support and now has its sights set on reaching $4.5. Both the daily and weekly market structures are currently displaying bullish signals, although there is a hint of bearish divergence for WLD.
This could potentially lead to a price correction in the near future. Despite this, the $3.26 level has also been converted into a support level, making a significant retracement seem unlikely given the strong capital inflows.
Rising Bullish Momentum Reflected in Moving Averages Alignment
Looking at the daily chart, WLD went through a significant downward trend from March to September, which was followed by a period of consolidation. Since hitting its lows in September, WLD has surged by 198% up to the current moment. The majority of these gains were achieved over the past ten days following the breach of the $2.5 resistance level.
The $2.5 to $2.9 range has now been confirmed as a demand zone after a successful retest, propelling Worldcoin past the $3.26 resistance point, which had acted as a lower high back in July.
With the breach of $3.26, the weekly market structure has turned bullish. Meanwhile, the daily structure has been displaying bullish tendencies since the second week of November, recovering from a dip in late October that saw prices drop to $1.589.
The crossing over of the 20-day and 50-day moving averages signals a bullish trend and is likely to provide support in case of a retest. The Money Flow Index (MFI) currently stands at 81 and may indicate a bearish divergence by forming a lower high compared to December 1st.
The next target for the bullish sentiment is the $4.5 area, a crucial support zone back in April to June. Consequently, a breakthrough above this level might take some time due to an anticipated consolidation under this resistance level.
Short-Term Outlook Remains Optimistic
Despite the bearish divergence suggesting a potential pullback, the liquidation map indicates a probable northward movement. A substantial volume of short liquidations has accumulated around the $4 and $4.15 marks.
Notably, the high leverage around $4.13 indicates a likelihood of WLD surging higher to sweep through this region before any retracement. As of now, it remains uncertain whether the buyers have enough momentum to break past the $4 barrier.
Traders are advised to remain cautious of a breakout beyond $4, as the market may have reached an overextended state.
Disclaimer: The views expressed in this article are personal opinion and should not be considered as financial, investment, or trading advice.