Worldcoin may fall 9% below $1 as OI of futures contracts declines

The Worldcoin bulls (WLD) are struggling to prevent the previous day’s sell-off from spilling down to the support zone of around $0.9 due to rising inflation concerns in the United States.

At the time of writing, the token is trading around 1 dollar in the context of a significant decrease in interest, as evidenced by the unstable derivatives market.

OI Worldcoin decreases as liquidations surge

The open interest (OI) of the Worldcoin futures contract, which is the nominal value of existing futures or options contracts, is currently 38% lower than the July peak of 465 million dollars.

The continuous drop to 287 million dollars indicates that WLD is facing a risk-averse mindset as fewer traders bet on the possibility of a short-term price increase. If this trend continues, the likelihood of WLD recovering above 1 dollar in the near future may just be a distant hope.

The Worldcoin futures contract | Source: CoinGlassThe strong increase in subsequent liquidation orders further highlights the downtrend. In the past 24 hours, the total liquidation value reached 2.12 million dollars, with Long position holders suffering the largest losses of 2 million dollars.

Liquidation data for WLD futures contracts | Source: CoinGlassHowever, a bullish reversal trend may emerge in the upcoming sessions if the funding rate (support) for the futures contracts remains stable in the positive zone. A positive funding rate indicates that many traders are leveraging Long WLD positions, thereby increasing the likelihood of price recovery.

The funding rate indicator weighted by futures contracts of WLD | Source: CoinGlass## Technical outlook: Worldcoin is at risk of further declines

The price of Worldcoin is hanging by a thread, with the support level of 1 dollar seeming weak due to the widespread “risk-off” sentiment in the crypto market. The position of this token is below key moving averages, including the 50-day EMA, 100-day EMA, and 200-day EMA, all converging at the support level of 1.04 dollars, putting the bulls at a disadvantage.

At the same time, the MACD indicator issued a sell signal, recommending that investors consider reducing risk from WLD as the downward trend approaches the next important support zone at $0.9. The bearish pressure on WLD may still persist as the green MACD line remains below the red signal line.

WLD daily price chart | Source: TradingviewThe relative strength index (RSI) is decreasing to the zone of overselling, confirming strong bearish pressure amidst weakened buying force. Traders should monitor the support level at $0.96 that was tested on Tuesday and the lower demand zone at $0.90 that was tested on August 2nd. Strong rebounds from these levels may create dip-buying opportunities for investors looking to take advantage of the price drop.

Dinh Dinh