Assessing if Wormhole’s 13.93% hike is the start of a new bull rally

• 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.

Source: Coinglass

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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.