LayerZero (ZRO) is up 14.47% over the past 24 hours, with the altcoin up 4.7% on the weekly charts. Its relative strength compared to Bitcoin (BTC) and major altcoins could attract investor attention and capital.
Source: ZRO/USDT on TradingView
Why has ZRO price increased today? An analysis of the 1-day price chart showed that the pattern of market fluctuations 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 have defended this support convincingly. Buying pressure caused OBV to rise considerably, and local highs at $1.90 were also breached. At the time of writing, the MACD was in positive territory, on the verge of forming a bullish crossover again.
Therefore, it would appear that the price rebound could be technically driven, marking $1.46 as the floor. To the north, the $2.39 high and $2.67 extension levels appeared as bullish targets. A rally towards these levels could be likely. However, traders and investors should also keep an eye on on-chain metrics.
FX Balances and Profitable Holders Reflect Potential Selling Pressure on ZRO
Source: Glassnode
The on-chain metrics appeared to contrast sharply with ZRO’s strongly bullish technical outlook.
In fact, over the past month, the net change in foreign exchange position has been decidedly positive. This may be a sign that ZRO inflows have outpaced outflows – evidence that holders could profit during the rally to $2.39.
Source: Santiment
This view has been reinforced by the decline in the average age of the currency. The metric’s downward slope over the past month reflects the distribution of holders. It was accompanied by significant peaks in dormant circulation towards the end of January.
Additionally, the 180-day MVRV ratio returned to positive territory. It revealed that on average, ZRO buyers over the past six months made a profit of 6%. The retracement from the $2.39 level saw MVRV rise to 24.75%.
Holders and investors may remain optimistic. Especially since price action is generally an extremely reliable tool. At the same time, the threat of profit-taking may also be present. This may delay or even derail a rally to $2.69.
Final Thoughts
- Strong demand and a bullish technical outlook have driven LayerZero’s price rise.
- A rally to $2.69 is likely, but the threat of profit-taking pressure could delay this move.
