In the last month, Worldcoin [WLD] has steadily decreased, shedding 11.70% of its value. This downward trend persists on a daily basis, with an additional 5.74% drop, signaling strong bearish domination and increasing the chances of further declines.
CryptoCrypto delves into the consequences of the ongoing market direction and speculates on the upcoming scenarios for the asset.
Potential Revisit to September’s Lows?
WLD is edging towards a critical support level that has historically acted as a catalyst for upward price movements several times. However, this time, the situation appears likely to deviate from the norm.
Following a notable drop post encountering resistance at $2.398, resulting in a 5.78% slide, WLD could either bounce off the support level or descend further.
In the latter scenario, an additional 41.88% dip would push WLD down to its September low of $1.284.
Technical indicators, such as the Parabolic SAR and Relative Strength Index (RSI), are hinting at the likelihood of further price drops.
The Parabolic SAR, which visualizes market sentiment through dots above (sell) or below (buy) price levels, is currently showing bearish sentiment with dots positioned above the price, exerting downward pressure.
Likewise, the RSI, which gauges sentiment on a scale where values below 50 indicate significant selling pressure and values above 50 signal buyer interest, stands at 39.49. This figure indicates strong bearish control and the potential for WLD’s price to decline further.
Growing Contract Closure
Open Interest, a measure of outstanding derivative contracts in the market, indicates the strengthening of bearish sentiment.
The Open Interest has dwindled by 4.52% to $286 million, suggesting that market participants are liquidating their positions. Moreover, a 17.97% decrease in trading volume to $431 million corroborates the firm grip of bears, heightening the chances of additional price decreases.
Considering these signals, WLD faces an elevated risk of revisiting its September low. Nevertheless, a deeper analysis hints that this decline could be postponed.
Can Development Activity Sustain WLD?
Worldcoin, the entity behind WLD, has recently been recognized as one of the leading projects in terms of development activity, showing a 240% surge over the last 30 days, trailing projects like Arbitrum, according to Chain Broker.
A surge in developmental activity typically indicates ongoing enhancements focused on elevating the overall project quality, often resulting in a positive repercussion.
If this momentum endures, it might postpone WLD’s potential price slump before a subsequent downward move.