With Worldcoin [WLD] successfully turning the $2.5 resistance into a supportive zone and setting its sights on the $4.5 level, both the daily and weekly market structures have shown a bullish trend, despite an observed bearish divergence for WLD.
This might lead to a potential price decline in the upcoming days. Following the flip of the $3.26 level to support, the likelihood of a significant retracement seemed low due to the strong inflow of capital.
Observing Worldcoin’s Bullish Momentum through Moving Average Crossover
Examining the daily chart for WLD, a sharp downtrend was witnessed from March to September, succeeded by a month-long consolidation period. From the September lows, Worldcoin surged by 198% as of the latest data. A substantial part of this surge occurred in the past ten days after breaching the $2.5 resistance zone.
The $2.5-$2.9 range has been reaffirmed as a demand zone after being successfully defended by buyers, propelling Worldcoin above the $3.26 resistance level, previously marking a lower high from July.
The shift to a bullish weekly market structure came after surpassing $3.26, while the daily structure has reflected bullish sentiment since the second week of November, following a price dip to $1.589 in late October.
With the 20 and 50-day moving averages indicating a bullish crossover, they are likely to act as support if a retest occurs. The Money Flow Index (MFI) currently stands at 81 and could potentially form a bearish divergence by marking a lower high compared to December 1st.
The next goal for the bullish trend lies at the $4.5 threshold, which previously served as a significant support level from April to June, suggesting that breaking past this point might require some consolidation below the resistance level before further advancement.
Short-term Market Sentiment Remains Strongly Positive
Despite the bearish divergence hinting at a possible price correction, indications from the liquidation map point towards a probable upward movement. Notably, a substantial number of short liquidations are concentrated around $4 and $4.15.
The considerable leverage accumulated around the $4.13 mark implies a potential upward surge to clear this region before any retracement occurs. It remains uncertain at the moment whether the buyers possess adequate momentum to drive prices above $4.
Traders are advised to exercise caution in case of a breakout past $4, as the market might be exhibiting signs of being over-extended.
Disclaimer: The information shared should not be considered as financial, investment, or trading advice. It solely represents the opinion of the writer.