Wormhole Price Rejection After 12% Rally on Ripple Partnership

Wormhole, a cryptocurrency, recently experienced a price rejection, leading to a debate among traders and analysts about whether it was the result of a short squeeze or an organic rally. The cryptocurrency had established a bullish structure on its 1-day chart, with the $0.07 demand zone being crucial for traders to maintain their bullish outlook. On 28 June, the price of Wormhole briefly climbed past the $0.08 level, breaking through a previous local high made in June. However, the price subsequently fell to fill the fair value gap at the $0.07 region.

The volume indicators suggested that the market structure break was genuine and not a liquidity hunt. The Chaikin Money Flow (CMF) was at +0.09, indicating sizeable capital inflows into the Wormhole market. The On-Balance Volume (OBV) also trended higher over the past ten days, while the Money Flow Index (MFI) climbed above 50 and rose to 64, signaling greater buying pressure and upward momentum. Traders could use the retracement of the past four days to buy more Wormhole tokens, with a move below the $0.068 level indicating a failed breakout. Swing traders could set their stop-losses in the $0.065-$0.068 area, targeting the $0.08 and $0.091 resistances to take profits.

The recent price rejection could be attributed to several factors. Firstly, the listing of Wormhole on a leading U.S. crypto exchange provided short-term bullish impetus. However, the longer-term trend did not shift bullishly, and data showed that 89% of the holders were out of the money. This could make it difficult for the bulls to build up momentum against persistent sellers. Secondly, Wormhole entered into a strategic partnership with Ripple, aiming to integrate multi-chain interoperability with the XRP Ledger and its EVM-compatible sidechain. This development saw a 12% price rally for the day, but the longer-term trend did not shift bullishly.

In conclusion, the recent price rejection of Wormhole could be the result of a short squeeze or an organic rally. The bullish structure on the 1-day chart and the volume indicators suggest that the market structure break was genuine. However, the high percentage of holders out of the money and the lack of a sustained bullish trend indicate that the price rejection could be due to profit-taking activity or holders trying to exit at break-even. Traders should monitor the $0.07 demand zone and the $0.068 level to determine the next move for Wormhole.