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- Worldcoin short sellers just got plunged into a tight short squeeze amid growing demand.
- The Worldcoin ecosystem has enough fundamentals, one that might make bearish bets a bad move.
A high demand for Wordcoin’s digital asset, WLD has been observed recently after months of downside which lasted for about five months. Although the rally looks like an upsurge, further evaluations have sparked curiosity on the probability of a short squeeze.
Worldcoin’s Bullish Rally
Over the last few days, Worldcoin’s price picked up fire from the ongoing crypto market rally, which led to Bitcoin soaring to over $65,000. Worldcoin’s upward movement was quite surprising because the token was bottoming out in the $1.72 to $1.77 price range, days earlier.
The recent rally on WLD, saw the token climbing to $3.14, inking a 77% monthly gain. While the cryptocurrency has since fallen below this price, it is still far above the earlier bottom range. Per data from MarketCap, WLD has declined by 1.69% in the past day to trade at $2.84. The trading volume also declined by 4.7% to $724,241,225, with the market cap standing at $791 million.
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Meanwhile, Worldcoin has made multiple attempts at a bullish ride before its most recent rally, since its historic fall that began in March. In May, Worldcoin recorded a price of $4.7 on the daily timeframe, as noted in our earlier report. At the time, the movement coincided with increasing addresses that suggest WLD may be on track for a potential bull run.
Similarly, the recent rally also suggests that bulls were on the takeover move. This is due to the prolonged downtrend, in addition to the price dropping below its pre-February low. Considering recent announcements in the Worldcoin ecosystem, this observation may have set the stage for heavy shorts liquidations amid growing bearish sentiments.
According to our recent report, the Worldcoin Foundation revealed beneficiaries of its Wave 1 community grants. The grant targeted different sections of Worldcoin’s technological roadmap, spreading its wings of innovation across the board.
Additionally, the foundation has also announced the commencement of token unlocks for early contributors, investors, and team members. As highlighted in our previous article, about 80% of investors and WLD tokens held by team members have been extended from 3 to 5 years.
Following this announcement, there was a surge in the number of short positions on WLD. This implied that traders could expect the increasing supply to overshadow the price of Worldcoin. Regretfully, the short sellers found themselves in a tight squeeze when WLD prices increased due to persistent demand.
Is Worldcoin’s Recent Rally Sustainable?
Notably, WLD has beaten most other major cryptocurrencies by percentage gains following its recent rally. Worldcoin’s recent rally bears resemblance to the beginning of its rise in April 2024, suggesting sustainable token growth.
However, the outcome may differ if investors become pessimistic due to the scheduled unlock, which might result in decreased demand. That being said, the scheduled token unlock may lead to a less severe supply surge. Either scenario could play out, hence the need for investors to stay informed on activities in the ecosystem.
