LayerZero [ZRO] has recently broken out of a traditional descending wedge pattern on its daily chart after bouncing off the $3 support level. Following this breakout, ZRO has surged approximately 50% within a span of 20 days, reaching a crucial resistance zone in the range of $4.5-$4.7.
As of the time of writing, ZRO was trading at about $4.5, marking a 22% increase in the last 24 hours. The price movement is currently positioned around an important intersection of resistance levels, with buyers striving to uphold the positive momentum.
Potential for ZRO to Stabilize if Altcoin Season Does not Commence
An analysis of the price chart indicates that the recent upward trend propelled ZRO to challenge the resistance near the $4.5-$4.7 range. The 20-day EMA (presently at $3.8) has crossed above the 50-day EMA ($3.76), signaling a bullish crossover that typically denotes escalating buying pressure.
If the bulls succeed in sustaining the momentum and achieving a close above the current resistance zone, ZRO could potentially extend its rally towards the psychological $5 resistance level. Nevertheless, a failure to secure a close above this range might result in a period of consolidation or a brief retreat towards the $4 support level.
At the time of writing, the Relative Strength Index (RSI) hovered around 65, indicating robust buying pressure without reaching overbought levels. A continued upward trajectory in the RSI, surpassing the 70 mark, could indicate further bullish momentum.
Conversely, a downturn in the RSI could signal a weakening trend, increasing the likelihood of imminent consolidation.
As of the present moment, CoinMarketCap’s Altcoin Season Index remains neutral. Observing this index closely is advisable, as a surge above the 50 level could signal the commencement of the altcoin season.
Analysis of ZRO Derivatives
ZRO’s trading volume has surged by 110.17% to hit $353.69 million, showcasing considerable investor interest. Simultaneously, Open Interest has risen by 20.72% (nearly $68.15 million), indicating that traders are actively initiating new positions and anticipate the rally’s continuation.
Over the last 24 hours, the long/short ratio for ZRO/USDT stood at 0.9543, suggesting a balanced sentiment. On Binance, regular accounts exhibited a long/short ratio of 1.9958, while top traders displayed optimism with a long/short ratio of 2.5676.
Traders are recommended to monitor Bitcoin’s broader market sentiment as it could impact ZRO’s price movements, especially as ZRO approaches critical resistance levels.