LayerZero (ZRO) Records $50 Million Outflows as Price Drops 31%

07/06/2024 03:30

Amidst bearish market signals this week, ZRO price is poised to test a crucial resistance level, which could result in profits.

LayerZero (ZRO) price is observing the impact of the broader market’s bearish cues as it struggles to rally.

The lack of bullishness among investors is also acting as resistance to any potential recovery ZRO could witness.

LayerZero Investors Are Skeptical

ZRO’s launch last month was met with considerable bullishness but the recent performance does not relay the same. In the past week, ZRO’s Open Interest plummeted by nearly 50%, falling sharply from $112 million to $66 million.

This significant decline suggests a reduction in the number of outstanding contracts or positions held by traders, indicating diminished market activity or a shift in sentiment.

Meanwhile, ZRO’s Chaikin Money Flow, which tracks buying and selling pressure, mirrors this bearish sentiment. The indicator reflects continued selling pressure on ZRO, implying that more capital is leaving the token than entering it. This trend typically indicates a negative outlook among investors and traders.

The combination of declining Open Interest and a bearish Chaikin Money Flow underscores a challenging period for ZRO. The substantial decrease in Open Interest indicates reduced market participation or possibly a loss of confidence among traders.

Simultaneously, the persistent selling pressure highlighted by the Chaikin Money Flow suggests ongoing bearish sentiment, potentially leading to further downside in ZRO’s price.

ZRO Price Prediction: Preventing Further Decline

ZRO’s price declined by 32% in the span of 48 hours but noted a 15% recovery over the past day. The altcoin trading under $3.42 is still susceptible to a decline as the bearish cues remain persistent. This could result in ZRO falling through the support at $3.00.

This would not only lower ZRO’s price to $2.50 but also leave it vulnerable to further decline.

But if the altcoin manages to breach the resistance at $3.44, it could climb back to $3.82. Breaking this barrier would push ZRO’s price to $4.00, invalidating the bullish thesis.

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Aaryamann Shrivastava is a technical and on-chain analyst at BeInCrypto, where he specializes in market reports on cryptocurrencies from diverse sectors, including Telegram Apps, liquid staking, Layer 1s, meme coins, artificial intelligence (AI), metaverse, internet of things (IoT), Ethereum ecosystem, and Bitcoin. Previously, he conducted market analysis and technical assessments of various altcoins at FXStreet and AMBCrypto, covering all aspects of the crypto industry, including...

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