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Assessing if Wormhole’s 13.93% hike is the start of a new bull rally
Wormhole’s surge raised some breakout hopes, but key resistances and on-chain signals may have something to say.
- Wormhole, at press time, faced key resistance at $0.3737, with strong support at $0.3245
- Open Interest climbed by 10.57%, suggesting strong trader interest despite mixed on-chain data
Wormhole [W] recorded a significant surge of 13.93% over the past 24 hours, propelling its price to $0.3626 at press time. This sharp hike, along with a 37% jump in trading volume, has raised questions about whether the token is nearing a breakout or not.
Investors are watching key technical levels closely to see if the momentum can continue or if a correction is around the corner.
Key support and resistance levels to watch
At the time of writing, the token was approaching a resistance level of $0.3737, according to Bollinger Bands analysis. If the price fails to break through, a retracement could follow. However, strong support at $0.3245 might allow the bullish trend to persist.
Additionally, the RSI had a reading of 68.64. This pointed to an overbought market condition, signaling that caution may be necessary as the asset nears these thresholds.
Source: TradingView
Wormhole social dominance – Still modest
The social dominance had a reading of 0.488%, indicating that it has not yet captured enough attention for a massive rally.
However, if social dominance rises, it could act as a catalyst for further price gains. Investors are closely monitoring online discussions to anticipate any shifts in market sentiment.
Source: Santiment
On-chain data provides mixed signals
On-chain indicators offer a more complex picture though. Net network growth fell by 3.59%, indicating slower user adoption. Large transactions also fell by 16.55%, pointing to a drop in whale activity.
However, the “In the Money” indicator flashed neutral, reflecting that most holders may be at break-even levels. These factors suggested potential volatility in the near term.
Source: IntoTheblock
Wormhole’s Open Interest on the rise
An optimistic sign for bulls is the 10.57% hike in Open Interest, with the same recording figures of $52.46 million at press time. This means more traders have been betting on sustained price action.
A hike in Open Interest could propel the token beyond its current resistance levels in the short term.
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Breakout likely, but caution is warranted
Given the current bullish momentum, rising Open Interest, and solid support levels, Wormhole may be poised for a potential breakout. However, the mixed signals from social dominance and on-chain data suggested that traders should remain cautious.
The key resistance at $0.3737 must be broken for a sustained rally. Therefore, while a breakout seems likely, close monitoring these metrics is crucial for navigating the market’s next move effectively.
