Worldcoin (WLD) has captured the attention of crypto enthusiasts and traders, surging by 31% over just six days. The cryptocurrency has managed to flip its previous resistance at $2.5 into support, and now the market is eyeing a possible surge to $4.5. However, despite the bullish momentum, traders are being cautioned about potential risks in the near term. Let’s break down the key factors driving this price action and what could happen next for Worldcoin.

The Surge and the Bullish Outlook

Worldcoin’s recent rally has been remarkable, especially considering the challenges the cryptocurrency market has faced in 2024. Since the lows seen in September, WLD has surged a staggering 198%, with a significant portion of the gains coming over the past ten days. The catalyst for this upward movement was the breach of the $2.5 resistance level, which had previously been a tough barrier to break.

After successfully flipping $2.5 into support, the next target for Worldcoin appears to be the $4.5 range. This level holds historical significance, as it had acted as key support between April and June earlier this year. The $2.5-$2.9 zone has now been retested and is seen as a demand zone, with buyers stepping in to defend it and push the price higher.

Both daily and weekly charts are reflecting a bullish market structure. The daily chart, in particular, shows that since mid-November, the market has been on an upward trajectory, following a brief pullback in late October. These positive technical indicators have contributed to the growing optimism around Worldcoin’s price action.

What Could Derail the Rally?

Despite the positive sentiment, not all indicators are signaling smooth sailing for Worldcoin. One concern among traders is the presence of bearish divergence in the market. The Money Flow Index (MFI) currently sits at 81, which suggests that the buying pressure may not be sustainable in the long term. A bearish divergence, where the MFI makes lower highs despite price gains, could signal that momentum is waning, and a price dip might be on the horizon.

In addition, the moving averages on the daily chart have formed a bullish crossover, which is typically seen as a positive signal for the price. However, with the MFI nearing overbought territory, there is a possibility that the market could become overextended, leading to a pullback toward key support levels like $3.3 before further gains are realized.

Short-Term Sentiment: Still Bullish, But Caution is Advised

Despite the potential for a pullback, the short-term sentiment around Worldcoin remains largely bullish. A liquidation map from Coinglass highlights significant short liquidations in the $4 and $4.15 price range, suggesting that the market may experience a push upward to liquidate these short positions before any significant retreat occurs.

The fact that there is considerable leverage built up around the $4.13 mark means that it is likely for Worldcoin to make a move toward this region. However, traders should be cautious, as pushing past the $4 resistance could be challenging without further consolidation or retracement. The market may need to pause and consolidate beneath $4 before moving higher, as the strength of the bulls could be tested at this level.

What’s Next for Worldcoin?

So, what can we expect for Worldcoin in the coming days? The cryptocurrency’s recent surge has caught the attention of many traders, but there are still several hurdles to overcome. While the bullish market structure suggests that $4.5 could be within reach, traders should remain cautious of potential retracements. The $3.26 support level and the $2.5 zone will be critical to watch in the event of a pullback.

The next few days could be crucial in determining whether Worldcoin can maintain its momentum and push beyond $4. If the market manages to overcome the $4 resistance without significant dips, then the $4.5 target becomes much more likely. However, if bearish divergence continues to play out, a retreat toward lower support levels, like $3.3, could happen before further gains.

Key Takeaways for Traders

1. Bullish Market Structure: Worldcoin has been experiencing a strong uptrend, with the $2.5 zone now acting as support.
2. Potential Resistance at $4: The $4 resistance level remains a key area to watch; a breakout could take time and require consolidation.
3. Bearish Divergence Risks: There is a potential risk of a price dip due to bearish divergence, with the MFI showing signs of weakening momentum.
4. Liquidation Map Shows Potential for Higher Prices: Short liquidations around the $4.15 range suggest the market could push higher before any significant pullback.
5. Stay Cautious: While short-term sentiment is bullish, the market could be overextended, and traders should be prepared for a potential correction.

In conclusion, Worldcoin’s price action is certainly exciting for traders, but caution is advised. With a potential dip toward $3.3 or a breakout beyond $4, the market remains in flux. Keeping an eye on key support and resistance levels, as well as monitoring the momentum indicators, will be critical in navigating the next steps for WLD.