LayerZero [ZRO] is down more than 11% in the past 24 hours as trading activity waned. ZRO was slumping while major cryptos like Bitcoin [BTC], Ethereum [ETH], and Ripple [XRP] gained almost 2%.
The more bearish signals were pointing to why LayerZero was declining despite a daily increase in mindshare. Mindshare rose by 28% with 3.46K engagements and mentions due to a partnership with Near Protocol [NEAR]. What were these bearish signals?
ZRO price prediction: Are traders bracing for more losses?
The main signal was the bearish market structure. Since equaling last October’s peak of $2.593 on the 11th of February, ZRO has been making lower levels.
ZRO broke below the sideways range between $1.244 and $2.593 last month. It confirmed the breakdown with a double retest of the $1.244 level, turning it from support to resistance.
LayerZero now appears to be trading toward the low created on October 10th’s crypto market crash. Since February, buy orders have dominated aggregate liquidations, resulting in long squeezes.
Additionally, the CVD shows selling pressure is gaining pace once again. In fact, more than 142K ZRO tokens were being sold at the time of press.
Therefore, it raises the question of whether the drop will continue down to the October 10 low of $0.310. Structurally, it looks like the more likely scenario, especially if the $0.740 zone breaks.
On the other hand, ZRO price is forming a consolidation with a triple touch of the zone. And the fourth one is coming. But why is ZRO more likely to break?
What’s heightening the price decline?
Long liquidations were spiking with almost no short liquidations. This amplified the price drop, with $512K long positions wiped out compared to $5.77K worth of shorts. These figures showed bulls lost to bears by a magnitude of 10x.
More leverage favored shorts. As per CoinGlass, cumulative short liquidation leverage was about $1 million between $0.799 and $0.885. On the other hand, long positions totaled $378.5K between $0.700 and $0.783.
These leveraged short orders indicated bears outweighed bulls by a 3x magnitude.
Furthermore, there was looming selling pressure from token unlocks. Every 20th day of the month, LayerZero has cliff unlocks of 25.71 million ZRO. This was equivalent to 4.40% of the released supply, which was 363.28 million ZRO tokens.
Therefore, ZRO remains bearish with $0.310 as the most viable demand zone if market conditions remain the same.
Final Summary
- LayerZero declined by 11% in the past 24 hours as the price continued to break below key structural levels.
- Long liquidations, upcoming token unlocks, and leveraged short orders add selling pressure to ZRO.
Be the first to comment