The crypto universe is ruthless, and in recent weeks, Worldcoin (WLD) has painfully demonstrated this. This project, although supported by OpenAI CEO Sam Altman, saw its value collapse, leaving 84% of its holders in losses. Investors, who may have believed in a surge similar to other successful cryptos, today find themselves facing a much darker reality. What happened to cause this promising project to turn into a financial nightmare? Let's look back at recent events.
An uncontrolled fall despite support from OpenAI
On October 3, while the crypto market was oscillating, Worldcoin was following a worrying trajectory. Its price fell 9% in just 24 hours, to reach $1.56, and this fall is not an isolated phenomenon. In just seven days, the WLD lost 25% of its value, plunging its holders into a spiral of losses. How to explain such a setback?
The recent fundraising by OpenAI, to the tune of $6.6 billion, could have been seen as an opportunity for WLD to stabilize or even rebound. However, this event did not have the desired effect. For some, it isa strategic error.
Contrary to expectations, the markets did not react favorably. Worse still, Worldcoin continued to fall. This fundraising, while impressive, failed to convince investors of the long-term strength of AI-related crypto.
Another key factor is the speculative nature of the crypto market. The Worldcoin project, although AI-related, is highly dependent on overall market movements and signals from Bitcoin and other altcoins.
Unfortunately, WLD failed to defend its critical supports, notably the $1.59 threshold, thus marking the start of its plunge. This loss of confidence resulted in a strong downward movement, fueled by fear and cascading selling.
Red indicators: an uncertain future for Worldcoin
Technical indicators are hardly more optimistic. The WLD crypto has now fallen below its 50-day moving average, confirming that the short-term trend is decidedly bearish.
The MACD (Moving Average Convergence Divergence) reinforces this hypothesis by indicating increasing selling pressure, with red bars accentuating the prospect of continued decline.
If buyers do not quickly step in to support the price, the next critical support level could be the $1.15 Fibonacci level.
The gap between portfolios making losses and those making profits has also suddenly widened. In the space of just one week, wallet addresses in profit went from 23% to a measly 6%.
This means that 84% of current Worldcoin holders are in losses, a colossal figure that has many considering selling to minimize their losses. A situation which, if it continues, could put additional pressure on prices, thus increasing the risk of further declines.
The derivatives data are hardly more encouraging. According to Coinglass, Open interest in Worldcoin fell 9% in just 24 hours, a sign that traders are closing their positions.
This trend suggests an increased loss of confidence in the near-term evolution of crypto. Furthermore, liquidations reached $2.47 million, of which $2.15 million came from long positions, highlighting the inability of investors to support prices.
A big blow for AI-related crypto
It’s not just Worldcoin that’s suffering. The overall market for cryptos linked to artificial intelligence is losing momentum, with capitalization down 6%, to reach $26 billion.
AI-related projects, once considered the future of crypto, are now facing headwinds. The hype around these projects seems to be running out of steam, leading to severe corrections and losses for those who had bet big.
So, what can we expect for Worldcoin in the coming months? Until the overall market shows signs of recovery, and critical support levels continue to give way, it is difficult to see a strong comeback for WLD. However, as with any crypto, trend reversals can be quick and unexpected. For some, USDT fall foreshadows altcoin season.
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