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- More than $70 million WLD is set for unlocking with a potential impact on price.
- WLD continues to battle crucial price levels amid volatility spikes but with positive long-term forecasts.
The Worldcoin project developed by OpenAI’s Sam Altman is preparing to unlock a substantial amount of its native token, WLD. This scheduled release raises concerns about how the market will handle the new supply and the potential impact on WLD’s price.
Impact of Wordcoin’s Linear Token Unlock on Bearish Trend
Notably, Worldcoin’s linear token unlock event would result in 37.23 million WLD tokens, valued at $70 million, flooding the market. The 37.23 million tokens represent 3.8% of the $958.5 million total circulating supply.
Unlike one-time token unlocks, Linear unlock events release tokens gradually over a period. This strategy helps lessen the immediate effects of oversupply since tokens are distributed in batches. However, linear unlock can cause increased selling pressure if early investors or insiders decide to liquidate their newly unlocked tokens.
Thus, WLD’s 37.23 million linear token unlock could impact market sentiment. In addition, the gradual rise in circulating supply may fuel a downward pressure in the short term. This would happen especially if the market fails to absorb the new tokens seamlessly.
Recent data from Dropstab reveals that Worldcoin has performed some minor unlock events since the beginning of the year. Before these events, Worldcoin unlocked 37.23 million tokens in September, as highlighted in our previous article. At the time, the unlocked tokens represented 8% of WLD’s circulating supply.
The recent linear token unlock could result in a bearish or bullish outcome for Worldcoin. An optimistic scenario is to see the market absorb the unlocked tokens without any major disturbances, opening the door for a comeback. Positive events in the Worldcoin ecosystem or broader market dynamics may amplify this outlook.
Alternatively, an increased selling pressure could result in a bearish scenario, pushing the price below important support levels and further drops.
WLD’s Bearish Trend and Technical Analysis
At press time, WLD price was trading at $1.84, down 11.92% in the last 24 hours. This dip comes just before the token unlocking event, reflecting traders’ rising caution. WLD struggled to maintain momentum on the daily chart, with key technical indicators signaling bearish sentiment.
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The 200-day moving average is $2.412, while the 50-day moving average averages $2.334. Should WLD remain below these levels, the negative trend that began in December will be extended. Furthermore, the Relative Strength Index (RSI) sits at 39.91, indicating that the token has not entered oversold territory.
Still, the indicator has not yet signaled a reversal. However, the daily trading volume increased by over 64% to $320.5 million, indicating high market activity as players anticipated the unlocking.
Importantly, Worldcoin hovers around the $1.80 support level, which could determine its price in the short term. A decline below this level might result in more losses, with $1.50 looming as the next key support.
However, the $2.00 and $2.334 resistance levels are critical for rebounding. Worldcoin’s ability to break above these barriers would suggest a return to positive sentiment.
It is important to note that the bearish sentiment surrounding Worlcoin’s price also comes amid legal challenges in Brazil. In our last update, CNF mentioned that Brazil’s data regulator prohibited Worldcoin from compensating residents in crypto for biometric data collection.
