LayerZero's ZRO fell more than 11% in 24 hours while Bitcoin, Ethereum and XRP each gained almost 2%. Long liquidations of $512K, a broken $1.244 support level and monthly cliff unlocks of 25.71 million tokens are stacking selling pressure on the token. ZRO remains bearish with $0.310 as the most viable demand zone if market conditions remain the same.
LayerZero's ZRO fell more than 11% in the past 24 hours as trading activity waned. Bitcoin, Ethereum and XRP gained almost 2% while ZRO slumped.
The drop came despite a daily increase in attention. Mindshare rose by 28% with 3.46K engagements and mentions due to a partnership with Near Protocol.
Broken range points ZRO toward the October low
Since equaling last October's peak of $2.593 on February 11, ZRO has been making lower levels. It broke below the sideways range between $1.244 and $2.593 last month, then confirmed the breakdown with a double retest of $1.244 — turning that level from support to resistance.
The token now appears to be trading toward the low created in October 10th's crypto market crash. Whether the decline extends to that $0.310 low structurally looks like the more likely scenario, especially if the $0.740 zone breaks.
On the other hand, ZRO is forming a consolidation with a triple touch of the zone, and the fourth touch is coming.
Long liquidations and token unlocks add pressure
Two forces are compounding the structural breakdown: forced liquidations and scheduled supply.
Long liquidations were spiking with almost no short liquidations, and $512K of long positions were wiped out compared with $5.77K worth of shorts — figures that showed bulls lost to bears by a magnitude of 10x. Since February, buy orders have dominated aggregate liquidations, resulting in long squeezes.
More leverage favoured shorts. As per CoinGlass, cumulative short liquidation leverage was about $1 million between $0.799 and $0.885, while long positions totalled $378.5K between $0.700 and $0.783. These leveraged short orders indicated bears outweighed bulls by a 3x magnitude.
The CVD also shows selling pressure gaining pace once again, with more than 142K ZRO tokens being sold at the time of press.
Furthermore, there was looming selling pressure from token unlocks. Every 20th day of the month, LayerZero has cliff unlocks of 25.71 million ZRO, equivalent to 4.40% of the released supply of 363.28 million ZRO tokens.
Source: AMBCrypto
Trading involves risk.
Risk Disclaimer
