Worldcoin (WLD), an AI-related cryptocurrency, has recently been grappling with a downtrend on the charts, a situation further complicated by recent actions from Alameda Research, the trading arm of the now-defunct FTX. As the market navigates these turbulent waters, Worldcoin’s position remains precarious.
Recent developments have spotlighted Alameda Research's dealings with Worldcoin. According to data from Lookonchain, Alameda recently transferred a significant portion of its Worldcoin reserves, specifically 205,387 WLD tokens, valued at approximately $352,000. This transaction coincided with a major legal judgment against Alameda, following a lawsuit by the Commodity Futures Trading Commission (CFTC).
A New York judge has mandated that Alameda pay $12.7 billion as part of a resolution to the lawsuit. The ruling requires FTX and Alameda to make $8.7 billion in restitution to those affected by their violations of the Commodity Exchange Act, plus an additional $4 billion in disgorgement of illicit gains. At present, Alameda retains 24.795 million WLD tokens worth over $43 million, raising concerns that further sales might be on the horizon.
Worldcoin has struggled with a sustained bearish trend in recent weeks. Despite a brief rally on August 8, when the token appreciated by 20.22%—climbing from approximately $1.50 to $1.80—the gains were short-lived. The price has since retraced, trading at around $1.70, reflecting a 6.52% decline from its recent peak.
Technical analysis reveals that WLD is currently under bearish pressure, as evidenced by its position below the neutral 50-mark on the Relative Strength Index (RSI). This suggests a continued lack of bullish momentum in the market.
Adding to the bearish sentiment, recent derivatives data highlights a dominant presence of short sellers in the Worldcoin market. Analysis from Coinglass indicates a negative funding rate for WLD over the past few days. At the time of writing, the funding rate stands at approximately -0.0197. This negative funding rate suggests that short sellers are being compensated for holding their positions, as maintaining long positions becomes more costly.
A negative funding rate typically indicates that short positions are favored in the market, further stressing the bearish outlook for Worldcoin. Traders who are betting against WLD are currently benefiting from lower costs to maintain their positions compared to those holding long positions.
Worldcoin finds itself at a crossroads, grappling with both internal market pressures and external factors like Alameda’s reserve movements. While the brief rally in early August provided a glimmer of hope, the overarching trend remains bearish. As Alameda's legal troubles continue to unfold and with market sentiment skewing towards short positions, Worldcoin’s path forward may remain uncertain.
Investors and market watchers should remain cautious and closely monitor developments related to both Worldcoin’s market performance and the ongoing legal implications for Alameda Research.
August 2024, Cryptoniteuae