NOIDA (CoinChapter.com) — Worldcoin (WLD) has been under pressure recently, with its price trading near $2.18 after a sharp sell-off from the $3.2 range. Regulatory challenges and broader market volatility have contributed to this decline, raising questions about the project’s sustainability and compliance. Investors remain cautious amid heightened scrutiny over data privacy and potential governance risks, leaving WLD in a precarious position.

OpenAI’s Regulatory Troubles and Their Impact on WLD

OpenAI, co-founded by Worldcoin’s figurehead Sam Altman, was fined $15 million by Italian regulators for breaching privacy and data protection laws. The accusations center on mishandling user data, a critical issue given the European Union’s stringent GDPR requirements. The penalty amplifies concerns about companies associated with Altman, especially Worldcoin, which has already been scrutinized for its biometric data practices.

OpenAI fined €15M by Italy for ChatGPT privacy violations.

Worldcoin’s reliance on collecting iris scans for identity verification has drawn criticism from privacy advocates, who argue that such data collection could be invasive and vulnerable to misuse. The fine against OpenAI strengthens the argument that Altman-linked projects may face increased regulatory roadblocks. Should EU regulators or others extend their focus to Worldcoin, the project could encounter fines, operational restrictions, or even bans in certain regions.

The news spells uncertainty for WLD holders. Regulatory concerns weigh heavily on market sentiment, with the token already seeing sharp declines from its peaks. A potential investigation into Worldcoin could further erode investor confidence, triggering a sell-off. Conversely, proactive compliance measures by Worldcoin could ease concerns and stabilize the price. However, the fine against OpenAI underscores the precarious balancing act Altman’s projects must maintain to avoid further backlash.

Further Bearish Cues From Technical Setup

Meanwhile, the WLD USD pair has formed a bearish technical setup, ‘the rising wedge,’ which could further complicate matters for the Worldcoin token.

WLD USD pair has formed a bearish setup with a 65% downside target. Source: Tradingview

The rising wedge pattern signals a potential reversal in the current trend. Identified by two upward-sloping lines converging towards each other, the resistance line ascends at a gentler slope than the support line.

The pattern forms during an upward trend with a series of higher highs and higher lows, indicating reduced buying momentum. As the wedge progresses, the distance between the resistance and support lines decreases, showing weakening momentum.

Typically, the rising wedge leads to a downward breakout. The price breaks below the support line, often with increased trading volume, signaling strong selling pressure.

Traders calculate the price target for the pattern by measuring the vertical distance between the wedge’s initial high and low points and subtracting this from the breakout point.

Per the rules of technical analysis, if the Binance Coin price breaks below the bearish pattern, the WLD USD pair might fall to the theoretical price target near $0.77, a drop of over 65% from current levels.