đ Investors Increase Short Positions on Worldcoin Token
OpenAI CEO Sam Altmanâs crypto project Worldcoinâs token, WLD, is experiencing a decline due to investor selling pressure. In the altcoinâs futures market, there has been a notable increase in demand for short positions, as evidenced by negative funding rates on major cryptocurrency exchanges. According to Coinglass data, WLDâs funding rate has been predominantly negative since July 11.
đž Whatâs Happening with Worldcoin?
Funding rates are a mechanism used in perpetual futures contracts to keep an assetâs contract price close to its spot price. When positive, it means more investors are buying the asset, indicating a higher number of investors expecting a rise in price compared to those expecting a fall.
Conversely, when an assetâs funding rate is negative, it means more investors are taking short positions. This indicates a higher number of investors expecting the assetâs price to fall compared to those hoping to sell at a higher price.
The increase in demand for WLD short positions began after Worldcoinâs developer, Tools for Humanity (TFH), announced plans to release 2 million tokens daily starting July 24. This reflects a lack of confidence in the token, with many investors betting against it. The selling pressure on WLD has increased in recent days, causing its price to drop and leading to the liquidation of several long positions.
Liquidations occur when an assetâs value moves against an investorâs position, forcing the position to close due to insufficient funds to maintain it. Long liquidations happen when the assetâs price falls below a certain level, forcing investors with open positions to buy tokens to exit the market. According to Coinglass data, WLDâs long liquidations reached approximately $11.46 million in the past seven days.
