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After recovering from the recent hacking crisis, LayerZero [$ZRO] reclaimed $1 and jumped to $1.2. However, the altcoin faced rejection at this price level. As a result, $ZRO has closed at lower lows for three consecutive days, breaching $1 support to a low of $0.09.
At press time LayerZero traded at $1.007, down 5.7% on the daily charts. Amid this price slip, some investors, especially whales, are choosing to exit positions.
Whale offloads $3.96M in $ZRO
With $ZRO declining for three consecutive days, a whale has significantly increased spending. Arkam data revealed that the whale has been aggressively selling over the past 24 hours.
In the past day, the wallet transferred 3.51 million $ZRO tokens worth $3.96 million to Binance, making the moves in portions. Despite these deposits, the wallet still holds 1.2 million $ZRO valued at $1.2 million.
With such a major holder depositing during a period of weakness, it is mostly to lock in gains and also operational expenses. Since the wallet still holds a significant share of holdings, it suggests the holder is yet to fully capitulate.
Source: Santiment
Additionally, other market participants have also been selling as the Exchange Flow Balance remained positive at press time, hovering around 5k. A positive flow balance suggests that more sellers are active than buyers.
With intense sell-side activity, supply has increased significantly, thus reducing scarcity. Often, such market conditions have further weakened the market, leading to a price drop.
Can $ZRO bulls hold $1?
The whale selling further exacerbated an already weakened market. In fact, the market lacks strong momentum, with downside risk remaining elevated.
Looking at the Stochastic Momentum Index (SMI), the indicator sat deep within oversold territory at 6 as of writing. The SMI at such low levels suggests that sellers are dominating the market.
Source: TradingView
With bullish pressure remaining minimal, this suggests the prevailing trend is likely to continue. Currently, LayerZero is testing its key support at $1. If the recent selling spree in the market continues, $ZRO will lose the $1 support again and drop towards the $0.88 support level.
However, if the $1 support holds, the altcoin will be strong enough for another leg up, rebounding towards $1.3.
Final Summary
- An investor wallet transferred 3.51 million $ZRO tokens, worth $3.96 million, to Binance.
- LayerZero faces intense selling pressure, risking another dip toward $0.88.
