Worldcoin’s $70M token unlock looms: Can WLD weather the pressure?

• Worldcoin’s gradual token unlock aims to reduce immediate supply shocks, but still, risks extended selling pressure.
• WLD’s key support at $1.80 and resistance at $2.00 will define its near-term price trajectory post-unlock.

Worldcoin [WLD] is set to undergo a significant linear unlocking event. 37.23 million tokens, representing 3.92% of its circulating market cap, will be entering the market.

This planned release raises questions about how the market will absorb the new supply and its potential impact on price dynamics.

WLD: Bearish trends dominate

As of the 27th of January, WLD was trading at $1.866, reflecting a 6.28% decline over the past 24 hours. This drop precedes the token unlocking event and highlights the growing caution among traders.

On the daily chart, WLD has struggled to maintain momentum, with key technical indicators signaling continued bearish sentiment.

Source: TradingView

The 50-day moving average is positioned at $2.334, with the 200-day moving average at $2.412. WLD remains below both these levels, reinforcing the downward trend observed since December.

Additionally, the Relative Strength Index (RSI) was at 39.91, indicating that the token was approaching oversold conditions but is not yet signaling a reversal.

The trading volume of 22.96 million WLD suggested subdued market activity as participants awaited the unlocking.

Understanding linear unlocks and market impact

Unlike one-time token unlocks, linear unlocking events release tokens gradually over a set period.

This structured approach helps reduce the immediate impact of oversupply, as the influx of tokens is distributed over time rather than flooding the market all at once.

However, even linear unlocks can contribute to increased selling pressure if early investors or insiders decide to liquidate their newly unlocked holdings.

For WLD, the linear unlocking of 37.23 million tokens could still weigh heavily on market sentiment. As of the writing, the unlock is worth around $70 million.

The gradual increase in circulating supply may create downward pressure over the short term, particularly if the market fails to absorb the additional tokens seamlessly.

According to data from Dropstab, there have been some minor unlocks since the beginning of the year. 

Key technical levels and trends

Worldcoin’s price is hovering near the critical support level of $1.80, which could play a decisive role in the short-term outlook.

A breakdown below this level might lead to further declines, with $1.50 emerging as the next significant support.

Resistance levels at $2.00 and $2.334 are pivotal for any potential recovery, as overcoming these barriers would signal a return of bullish sentiment.

The Ichimoku Cloud further highlights bearish momentum, with WLD trading below key cloud levels.

This suggests that sellers currently have the upper hand, although a shift in market sentiment could create opportunities for buyers to step in.

Future scenarios for WLD post-unlock

The linear unlocking of tokens presents two possible outcomes for Worldcoin.

In a bearish scenario, gradual selling of unlocked tokens may lead to sustained downward pressure, pushing the price below key support levels and triggering further declines.

Alternatively, in a more optimistic scenario, the market could absorb the unlocked tokens without significant disruptions, paving the way for a recovery.

Positive developments within the Worldcoin ecosystem or broader market trends could amplify this outlook.

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While the gradual release mechanism mitigates the risk of an immediate supply shock, it still adds complexity to WLD’s price trajectory.

With the token currently in a bearish phase, traders should closely monitor key levels and market sentiment to navigate potential volatility effectively.