Worldcoin must break a strong psychological barrier to continue rising
Worldcoin (WLD) is the native token of the digital identity protocol of the same name.
Like other volatile cryptocurrencies and tokens, such as bitcoin (BTC) or ether (ETH), WLD quote depends on supply and demand in the market.
As of this writing, each WLD is traded on major exchanges, e.g. Binancefor $2.23, as can be seen in the TradingView chart below.
The previous image has marked an area (marked by a purple rectangle) in which WLD has lateralized on numerous occasions. As explained in Cryptopedia (education section of CriptoNoticias), support and resistance areas tend to repeat themselves over time due to market psychology.
By “market psychology” we mean how investors’ emotions and perceptions influence their buying and selling decisions.
Humans tend to act in predictable ways under certain conditions, which creates recurring patterns on price charts. These patterns, such as supports and resistances, are formed when a cryptocurrency or financial asset reaches certain price levels where investors tend to buy or sell, influenced by their expectations that the price will change direction.
The supportfor example, is a level where many investors consider the price to be low enough to be a buying opportunity, which slows the fall and can cause an upward rebound.
On the other hand, the resistance is the level at which many investors consider the price to be high enough to sell, creating a barrier that prevents further increase in value.
These behaviors are the result of risk aversion, greed and fear, emotions that are present in speculative markets such as cryptocurrencies.
Traders often use these zones to make strategic decisions, hoping that the psychological reactions of other market participants will follow similar patterns to those previously observed. This recurrence is what makes support and resistance levels key tools in technical analysis (although, of course, they are not infallible).
For WLD to resume its upward trend, the token should overcome the $3 barrier with sufficient volumeapproximately. If that were to happen, only then could we think about resuming the path towards previous highs.
Keep in mind that the march towards $11 (assuming that level is reached again) will not be without falls. WLD is likely to face resistances at $3.30; $4.5; and $7.00, which have been seen in the past.
Furthermore, it should be considered that WLD is not a “lone ranger”, but rather “dances”, along with the rest of the cryptocurrencies, following the rhythm of bitcoin, which is the life of the party. When bitcoin rises in price, the rest of the digital assets usually rise too. When bitcoin goes down, everything else goes down too (and usually much harder).
Therefore, What happens with bitcoin will be fundamental for altcoins like WLD. Very possibly, the result of the presidential elections in the United States on November 5 will be a key piece of information that will drive the financial markets up or down. Until then, the current lateralization scenario would likely continue.