Wormhole (W) Prepares for Potential Bullish Breakout
Wormhole's $W Token: Bullish Signals Emerge
The Wormhole token ($W) has been consolidating for several months, but technical indicators now suggest a potential bullish breakout. Traders are closely monitoring these signals, particularly a bullish divergence on higher timeframes. Increased trading activity and on-chain data are also being analyzed for confirmation of a shift in momentum.
Technical Analysis Points to Potential Upside
Several analysts have identified bullish setups on Wormhole's price charts.
Key Observations:
- Bullish Divergence: Crypto Rover highlighted a weekly bullish divergence between the $W price and the Relative Strength Index (RSI). The RSI has been trending upward while the token price has been setting lower lows, a classic reversal signal.
- Consolidation Phase: TraderPA noted the multi-month consolidation, suggesting a sharp price increase could follow a breakout, potentially a "3x" move.
- Inverse Head and Shoulders: Open4profit pointed to an inverse head and shoulders pattern, another indicator of a potential momentum change.
Currently, $W is trading around $0.25, down from highs near $0.40 in mid-August. The RSI has climbed from oversold levels (below 30) to around 45, indicating increased buying pressure. Key levels to watch are resistance near $0.35 and support around $0.22.
Analyst Perspectives and On-Chain Data
Michaël van de Poppe has identified $W as one of his preferred tokens, citing bullish divergences across multiple timeframes. He believes the token is "on the edge of breaking out," supported by ongoing developments from the Wormhole team.
Recent Developments: Portal Earn
The introduction of Portal Earn, a service allowing users to bridge, swap, stake, and earn rewards, could further support network adoption. Analysts suggest that such initiatives, coupled with incentive mechanisms, often attract more users.
On-Chain Metrics and Market Activity
Wormhole’s Total Value Locked (TVL) has increased by 20% in the past month, reaching $1.2 billion. This increase in activity is seen as confirmation of growing network usage.
Trading Volume and Open Interest:
- Daily trading volume for Wormhole derivatives has risen by nearly 50% to $62.37 million, indicating increased exchange activity.
- Open interest has decreased by 8.7% to $39.04 million, suggesting some traders have closed positions.
- Long positions have faced more liquidations than shorts, reflecting market instability despite the overall positive sentiment.
Retail and professional traders on Binance and OKX are heavily long on $W, although the overall long-short ratio stands at 0.92. Futures open interest climbed 12% to $30 million as of August 17, indicating that leveraged positions are still being built. The $W/USDT pair has risen 7% in 24 hours to $0.28, attracting interest from both swing and short-term traders.