Let's talk about #MarketDownturn of $WLD
With the updated WLD/USDT chart, we can analyze the reasons why the price has dropped from over $7 to close to $2 over the past 6 months, as well as what is expected to happen in the future. Here are the key points:
Technical Analysis:
Prolonged Downtrend:
The chart clearly shows a bearish trend since its high near $7.
Prices have continued to make lower highs and lower lows, indicating strong selling pressure and a lack of buying interest (watch out for this one).
The moving averages (MA7, MA25 and MA99) are aligned downwards, which supports this bearish trend in the medium and long term.
Volume:
High volume is observed at the beginning of the decline, probably due to massive selling or liquidations. However, volume has decreased as the downtrend has progressed, indicating a less active market with fewer interested buyers.
There are some volume spikes that coincide with temporary price rallies, suggesting buying attempts that failed to reverse the trend.
Stochastic RSI Indicator:
It has shown multiple oversold signals during the dips, indicating that there were times where the price fell too quickly. However, the lack of a significant change in trend despite these oversold signals indicates that there was not enough bullish momentum to reverse the downtrend.
Currently, the Stochastic RSI is showing a decline towards the oversold zone, suggesting that there could be a slight recovery or consolidation before a continuation of the decline.
MACD Indicator:
The MACD has been below the signal line for much of the bearish period, showing that market momentum remains negative.
- Recently, the MACD has shown a possible convergence, but has not yet given a clear reversal signal. This may indicate a consolidation phase or a pause in the downtrend.
5. Support and Resistance:
Support is seen around $2, a key level that the price has touched and bounced off slightly. If the price stays above this level, we could see a possible consolidation in this area.
Immediate resistances are found near $2.5 and $3, which are the areas to watch if the price attempts a rebound.
Key Factors:
News and Releases:
Sharp declines in assets such as $WLD may be associated with negative news, regulations or project issues that affected investor confidence.
There may have been external factors such as token sales by large investors, changes in project management, or regulations that negatively impacted the price.
Forecast and Expectations:
Short Term:
Based on the Stochastic RSI, we could see a minor bounce in the short term if enough buying volume comes in. However, the overall trend remains bearish, so any bounce could be limited to the nearby resistances ($2.5 and $3).
Medium and Long Term:
Unless key resistances are broken and moving averages start turning higher, the trend will remain negative. Investors should look for a bullish crossover on the MACD and an improvement in volume to confirm a possible trend reversal.
If the support at $2 breaks, we could see a further drop towards lower levels, where the next supports could be at $1.5 or lower.
In summary, $WLD has been in a strong downtrend due to technical and possibly fundamental factors. Although there could be minor short-term recoveries, the market is showing an overall negative trend and significant changes would be needed to reverse the current situation.