Worldcoin was trading for $0.4341 on the four-hour chart and this is good for an 11.64 percent gain during the day. While the figure looks impressive on its own, look at it from another angle. Over the past month, WLD has gone down by 16.72 percent, whereas over the past week the token has gone down by 7.94 percent. So even though the day’s increase was noticeable, it is just a ripple that fits into the larger downtrend that’s been taking place since late June.
Volume tells the same side. The 24 hour figure came in near $395 million, acceptable but this is still not the kind of surge that marks a trend change. RSI and momentum have firmed off the lows, and this is usual after a sharp drop into a support level. None of that is the more essential component, but the chart structure is.
The channel that pointed up but meant down
Most of the month of June, WLD continued to change hands within a close rising channel range, moving up from approximately $0.50 to approximately $0.65. However, at first this may seem very bullish, with price forming higher highs and higher lows along a well-defined set of parallel lines. The result was a bearish flag as a result of what that particular chart pattern typically does, which is signaling a following run-up.
The upward channel that is likely to happen following the time the price has moved up resolves downwards, as expected. This pattern was formed exactly here. The price moved out of the lower channel roughly on June 22nd, and that was followed by the drop that was rapid.
The asset’s price took a correction from the $0.63 region to $0.3522 in the space of roughly a week and it erased all of June’s gains in the process.
Like the flag does, this pattern did it, and the market participants that accumulated in the channel anticipating an upside breakout are now on the wrong side of the trade. That breakdown is now continuing to provide the context for everything that is currently transpiring. The existing bounce is not a new up move and is more of a response compared to the support level. This is an important thing to note, as the respective level did not allow the flag to break down any further.
The whole scenario is controlled by these levels
Worldcoin is changing hands between two ranges and resistances ranging between $0.3522 and $0.6317, respectively. Even though the bounce had pulled the price off its supports, the price action stayed away from the resistances from where the May breakdown originated.
This leaves $0.6317 as an important resistance, with a lot of market participants who have gotten in before May that may see a trip back to these levels to sell their positions. Until there is a close above, the asset will remain under pressure from the overhead supply zones.
A bullish conclusion for WLD would be to see it break through the $0.6317 barrier on increased trading volume, which indicates the bulls are pushing their way back, an indicator that should carry the price up to the mid-June high that is currently standing at about $0.72.
However, on the reverse, if the asset’s bounce declines and prices were to go back under $0.3522 then the price could potentially retrace some of its latest losses to a fresh low. This is the case because there is no support below $0.3522. In the meantime, it is highly expected to trade in a wide range spanning support and resistance during which both buyers and sellers fight it out for the next significant move.
