Worldcoin investors recently witnessed a significant 20% drop in value, with prices tumbling below the $7 mark. This decline signals a potential shift in the long-term market trend, prompting a reevaluation of investment strategies. Despite the dip, many believe Worldcoin remains undervalued. However, there might be better approaches than immediate buying, as the market currently favors sellers.
Moreover, the bearish sentiment in the short term contrasts with a generally bullish market structure for Worldcoin. This disparity calls for a closer examination of on-chain metrics and futures market data to gain a clearer market perspective. With Bitcoin also struggling to find its footing, investors should brace for possible increased volatility and prioritize risk management.
Notably, Worldcoin’s development activity, which had dwindled since mid-February, saw a resurgence post-March 16. This uptick in activity, along with a gradual increase in the Mean Dollar Invested Age (MDIA), suggests that a consolidation phase might be starting. Furthermore, the 30-day Market Value to Realized Value (MVRV) ratio’s drop to lows unseen since January 22 points to Worldcoin being undervalued.
Since April 1, both Open Interest and Worldcoin’s prices have seen a downward trend, reflecting a bearish market sentiment. The absence of a short-selling spree indicates that speculators are currently opting to stay on the sidelines. The Continuous Value Delta (CVD) for the spot market underscores the persistent selling pressure, likely driving prices further down.
As of press time, Worldcoin is trading at $6.85, with a decrease of 2.85% in the past 24 hours. Over the past week WLD has lost over 18%, while the monthly decline is at 13%. The daily low has been noted at $6.60, while the resistance is observed at the $7 key level. The trading volume has seen a significant drop of 25%, with a value of $238 million.
Technical analysis identifies the $4 region as a high-time frame (HTF) support zone that could trigger a bullish response. Nevertheless, should prices reach this point, the market structure would already bear a bearish imprint on the daily timeframe. The breach of the 78.6% Fibonacci retracement level further complicates the picture, with a daily close below $5.6 potentially flipping swing traders to a bearish stance.
Indicators such as the Relative Strength Index (RSI) and Chaikin Money Flow (CMF) suggest a bearish trend. The RSI is inching the oversold region, currently at the 40 index, while the CMF is trending in the negative region with a value of -0.23. This suggests a strong bearish momentum, with significant capital outflows from Worldcoin markets.
