The altcoin market has been crashing hard since last week. In fact, major altcoins from different sectors have graced the list of the market’s biggest losers over the last 24 hours.
On this front, LayerZero has led the way, losing 10% of its valuation during this period. Activity across its network has not only influenced this loss, but also the altcoin’s numerical outlook.
ZRO eyes 50% Fibonacci retracement level
According to the altcoin’s daily chart, ZRO had faked a breakout above the 0.786 Fibonacci Retracement level only to close below it. The retracement was deduced from 10 October’s crash that saw ZRO create a flash low of $0.315. This suggested that bears had controlled this market for more than three months.
LayerZero’s drop for the day extended the weekly losses to 15%. This figure put the altcoin behind only Ripple (XRP) and ZCash (ZEC) in terms of daily losses at press time.
Momentum in favour of more downside seemed to be increasing too – A sign that sellers were willing to pull the price further down. The MACD bars, becoming denser as the signal lines crossed over on the downward side, confirmed this observation.
This outlook suggested a potential revisit to the 50% retracement level, which coincided with a previous resistance zone. Here, things could change as bulls could come in and view this as a retest for the area. So, caution may be warranted here.
Staying below $1.718 would heighten the chances of a drop to $1.45 or lower. However, these targets could also be viewed as potential reversal points, as they house both major bulls and bears.
However, one question must be answered here – Is ZRO declining only because of its weak technical outlook?
Retail traders may be selling hard...
No.
In fact, its on-chain activity has been giving similar vibes. As per data from Etherscan, ZRO has been dropping because of intense selling from retail traders too.
A sea of orders worth between $10 and slightly above $100 has been flooding DEX platforms like Uniswap (UNI). At press time, only a few trades were long – Insignificant in number compared to shorts.
These findings are evidence of sell pressure from retail traders. Even though their volume has been usually small, they represent the sentiment of the general market. This might explain why the price of ZRO fell on the charts.
Transaction activity on LayerZero sliding too!
Finally, the transaction activity dipped below noticeable levels too. The number of transaction counts dropped by more than 70% in about three weeks – Down from 3,479 to 981.
Additionally, the number of transaction amounts fell from 27.735 million ZRO to 8.137 million ZRO over the same period. Together, these observations suggested that activity has been sliding, accelerating the price drop.
Here, it’s worth noting that according to popular analyst Benjamin Cowen, the near-term outlook for the market is bearish. What about the rest of the year though? Well, the analyst expects the same for Bitcoin (BTC). He claimed,
“BTC goes down and drags the rest of the market with it. Good chance this process ends later this year, so stay tuned!”
Final Thoughts
- ZROs price crashed by 10% on the back of a bear market structure and a fall in network activity.
- Some analysts expect the bear market to last through 2026.
