LayerZero Plunges 11% Amid Bearish Market Structure and Selling Pressure
LayerZero (ZRO) has seen an 11% decline in price over the past 24 hours, bucking the trend of other major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP), which have gained nearly 2%. Despite this downward momentum, LayerZero did receive a boost from its partnership with Near Protocol (NEAR), resulting in a 28% increase in mindshare.
However, the bearish signals for ZRO are more pronounced. The cryptocurrency has been making lower lows since reaching an October high of $2.593 on February 11th. Additionally, it broke below its sideways range between $1.244 and $2.593 last month, with a double retest of the $1.244 level turning it from support to resistance.
The current market structure suggests that LayerZero is likely heading towards its low created on October 10th's crypto market crash at $0.310. This is further exacerbated by the dominance of buy orders over aggregate liquidations, resulting in long squeezes. Furthermore, selling pressure is gaining pace, with more than 142K ZRO tokens being sold at the time of press.
The bearish trend is also supported by data from CoinGlass, which shows that long liquidations were spiking while short liquidations remained relatively low. This amplified the price drop, with $512K worth of long positions wiped out compared to just $5.77K in shorts. The cumulative short liquidation leverage was about $1 million between $0.799 and $0.885, while long positions totaled $378.5K between $0.700 and $0.783.