LayerZero [ZRO] has rallied by 14.47% in the last 24 hours, with the altcoin up 4.7% on the weekly charts. Its relative strength against Bitcoin [BTC] and major altcoins could draw investor attention and capital.
Why is ZRO’s price up today? An analysis of the 1-day price chart showed that the market swing structure was bullish. January’s rally from $1.20 to $2.39 was followed by a retest of the 78.6% Fibonacci retracement level at $1.459 last week.
ZRO bulls defended this support convincingly. The buying pressure made a sizeable uptick on the OBV, and the local highs at $1.90 were breached too. At the time of writing, the MACD was in positive territory, about to form a bullish crossover once again.
Hence, it would seem that the price bounce might be technically-driven, marking $1.46 as a floor. To the north, the $2.39 high and $2.67 extension levels emerged as the bullish targets. A rally to these levels may be likely. However, traders and investors should keep an eye on the onchain metrics too.
Exchange balances and profitable holders reflect potential selling pressure on ZRO
The on-chain metrics seemed to be in sharp contrast to the strongly bullish technical outlook for ZRO.
In fact, over the past month, the exchange net position change has been firmly positive. This may be a sign that ZRO inflows outweighed outflows – Evidence that holders might be taking profits during the rally to $2.39.
This view was reinforced by the falling mean coin age. The metric’s downward slope over the past month reflected distribution from holders. It was accompanied by sizeable spikes in the dormant circulation towards the end of January.
Moreover, the 180-day MVRV ratio was back in positive territory once again. It revealed that on average ZRO buyers in the last six months were at a 6% profit. The retracement from the $2.39-level saw the MVRV reach 24.75%.
Holders and investors might remain bullishly biased. Especially since the price action is usually an extremely reliable tool. At the same time, the threat of profit-taking may be present too. This can delay or even derail a rally to $2.69.
Final Thoughts
- Strong demand and a bullish technical outlook drove LayerZero’s price gains.
- A rally to $2.69 is likely, but the threat of profit-taking pressure could delay the move.
