Worldcoin’s price has barely begun recovering, and before the altcoin could reclaim its lost profits, the developers made a major announcement.
Could Worldcoin token unlock impact price negatively?
Worldcoin’s price is presently trading at $2.56 after a 63% increase throughout June and early July. However, over the last 24 hours, WLD has increased 37%, wiping some of the recent losses.
However, the recovery momentum that WLD is building will likely halt soon since the latest update has announced a major token unlock. In a blog on Tuesday, the Worldcoin developers announced that starting July 24, the WLD tokens allocated to the investors and team members of Tools for Humanity (TFH) will begin unlocking.
While the Worldcoin protocol and token were launched back in July 2023, the TFH supply was locked for a year to allow the protocol to mature before the holders could sell this supply.
Thus, a year later, next week, this unlock will begin. The process will be linear, with 2 million WLD worth about $5 million being unlocked daily. This will continue for the next four years until 2024.
This has become a major concern for altcoin investors and the crypto market, as token unlocks are bearish events. The flow of additional tokens into the circulating supply sometimes exceeds demand, causing a price drop.
Worldcoin developers addressed this concern by saying,
“The extended unlock schedule has the effect of slowing the increase in circulating supply.”
The final impact, however, will be seen from the next week, and at the same time, Worldcoin’s price will also make a move.
At the moment, WLD is attempting to breach the resistance at $2.78. This barrier has been tested for support in the past, making it crucial to the altcoin. A successful breach would push the crypto asset to $3.0 and higher to help recover the 63% losses.
On the other hand, if the investors panic and move to sell, this breach could fail, and Worldcoin’s price could get stuck between $2.78 and $1.73, resulting in consolidation.
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