Key Takeaways
- WLD surged to $1.14 before dipping to $1.03 as profit-taking, bearish derivatives, and declining momentum triggered a correction. Further downside to $0.96 is possible unless bulls regain control.
As the market soared following Bitcoin’s rally to an all-time high, Worldcoin [WLD] soared to a monthly high of $1.14. After reaching these levels, the altcoin faced strong rejection, resulting in a retracement.
At the time of writing, Worldcoin was trading at $1.03, marking a 3.91% dip. Before this dip, Worldcoin was on an upward trajectory, hiking by 18.09% on weekly charts.
But why did Worldcoin’s upward momentum fade so fast?
Profit takers creep in
Notably, Worldcoin’s recent price uptick saw profit for holders who had been underwater for the past 30 days surge. Therefore, after WLD’s price rallied, investors and holders rushed into the market to realize their profits.
According to Coinalyze, Worldcoin saw 45.40 million in Sell Volume compared to 38 million in Buy Volume.
On the 12th of July, this selling activity persisted, with Sell Volume reaching 6.79 million, while Buy Volume dropped to 6.23 million.
Source: Coinalyze
A similar pattern also emerged on exchanges. According to data from Santiment, Exchange Flow Balance jumped from -1.08 million to +40k as of this writing.
Such a massive upswing in Exchange Flow suggests that exchanges are recording more depositing transactions than withdrawing ones.
Source: Santiment
This market behavior is further evidenced by the fact that WLD’s Deposit Transactions have declined from 45 to 2, at press time.
Historically, such market behavior has preceded a decline in prices as downward pressure on prices intensifies.
Source: Santiment
Derivatives turn bearish
Importantly, as the Worldcoin price soared, investors rushed into the futures to take strategic positions, then disappeared just as quickly as they had appeared.
According to CoinGlass data, the Open Interest declined 9.6% to $272.6 million, while the Derivatives Volume decreased 30% to $765.6 million, at press time.
Source: CoinGlass
When both Open Interest and Derivatives Volume drop simultaneously, it signals reduced futures market participation and declining capital inflows. This suggests that investors are stepping back, likely awaiting clearer market direction.
Meanwhile, data shows that many are actively shorting Worldcoin. Over the past two days, Worldcoin’s Long/Short Ratio has remained below 1.
Notably, at press time, this metric was sitting at 0.91, indicating a stronger demand for short positions—meaning more traders are betting on the asset’s price to fall.
Worldcoin’s wild swing amid surging volatility
According to AMBCrypto’s analysis, Worldcoin faced a strong rejection at $1.14 as holders turned to profit realization.
As a result, the altcoin’s Relative Strength Index (RSI) retraced to 57, at press time, from a high of 61 the previous day. This decline signals weakening upward momentum, although it remains in bullish territory.
Source: TradingView
At the same time, Worldcoin’s Stochastic RSI declined from 93 to 89, almost making a bearish crossover, further confirming a weakening uptrend.
When momentum indicators are set in this manner, it signals a downtrend as bears retake control of the market.
That said, if sellers can maintain the recent pace, WLD will likely continue its correction and dip to $0.96.
To restore the uptrend momentum, bulls must return to the market and absorb the arising sell pressure. If they do, WLD can once again eye a recovery towards $1.1.