Over the past three weeks, Worldcoin [WLD] has experienced a significant decline of 34% following a breach in the bullish market structure that occurred in early January.
Initially anticipated to kickstart a resurgence, the aftermath has been a period of sustained losses with mounting concerns surrounding upcoming token unlocks.
Worldcoin Bears Navigate Downward Psychological Barriers
The retreat of Worldcoin has almost retraced entirely to the $1.589 level, representing a 100% retracement from recent highs. The failure of buyers to uphold the $2.14 support level has paved the way for a potential drop towards $1.59.
Notably, the $2.146 mark served as a critical 78.6% Fibonacci retracement level, indicating a further downward trajectory. Despite fluctuations near this support, persistent selling pressure has kept Worldcoin under strain with the On-Balance Volume (OBV) mirroring November lows.
With diminishing buying activity, the likelihood of extended losses increases, signaling $1.4 as the next crucial support level following a previous recovery phase in September 2024.
Moreover, the daily Relative Strength Index (RSI) has dwelled below the neutral 50 mark for a considerable period, underscoring the prevailing bearish sentiment.
Although a potential defense at $1.6 and a reversal in OBV selling trends could hint at a nascent bullish scenario, current market conditions do not favor such a development.
The prevailing sentiment remains firmly bearish, exemplified by a sharp decline on January 27th triggering numerous long liquidations as Worldcoin retested the $1.8-$1.85 support range.
Furthermore, a continuous decline in the Cumulative Volume Delta (CVD) over the past five days, coupled with decreasing Open Interest, highlights a pervasive bearish outlook and mounting selling pressures.
Disclaimer: The views expressed in this article are solely the author’s opinion and do not constitute financial, investment, or trading advice.