After recovering from the recent hacking crisis, LayerZero (ZRO) recovered $1 and rose to $1.2. However, the altcoin was rejected at this price level. As a result, ZRO closed at lows for three consecutive days, surpassing the $1 support to hit a low of $0.09.
At press time, LayerZero was trading at $1.007, down 5.7% on the daily charts. Amid this price decline, some investors, notably whales, are choosing to exit their positions.
A whale gives up $3.96 million in ZRO
With ZRO down for three consecutive days, a whale has significantly increased its spending. Data from Arkam revealed that Whale sold aggressively over the past 24 hours.
Over 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 contains 1.2 million ZRO worth $1.2 million.
With such a large holder depositing during a period of weakness, it is primarily a matter of locking in gains as well as operational expenses. Given that the portfolio still holds a significant portion of holdings, this suggests that the holder has not yet completely capitulated.
Additionally, other market participants also sold, as the exchange flow balance remained positive at press time, hovering around 5,000. A positive flow balance suggests that more sellers are active than buyers.
With intense sell-side activity, supply has increased significantly, reducing scarcity. Often, these market conditions have further weakened the market, causing prices to fall.
Can ZRO bulls hold $1?
The sale of whales further exacerbated an already weakened market. In fact, the market lacks dynamism and the downside risk remains high.
Looking at the Stochastic Momentum Index (SMI), the indicator sits deep in oversold territory at 6 at the time of writing. An SMI at such low levels suggests that sellers are dominating the market.
With upward pressure remaining minimal, this suggests that the prevailing trend is likely to continue. Currently, LayerZero is testing its key support at $1. If the recent wave of market selling continues, ZRO will once again lose the $1 support and fall towards the $0.88 support level.
However, if the $1 support holds, the altcoin will be strong enough for further upside, bouncing towards $1.3.
Final summary
- An investor portfolio transferred 3.51 million ZRO tokens, worth $3.96 million, to Binance.
- LayerZero faces intense selling pressure, risking a further decline towards $0.88.
