Layerzero has experienced significant downward pressure since it was rejected at $2.2 a week ago. The altcoin has closed at lower lows over the said period, touching a low of $1.8.
At press time, LayerZero [ZRO] traded at $1.83, down 8.42% on the daily charts. Over the same period, the altcoin’s market cap plunged 7% to $575 million.
Despite the market weakness, institutional players have continued to dump ZRO, further straining the market.
Alameda Research dumps 7.93 million ZRO
After 2 months of dormancy, Alameda Research resumed its LayerZero selling spree. According to Lookonchain, Alameda Research deposited 7.93 million ZRO worth $15.3 million to Wintermute.
With the recent sale, the team wallet has offloaded its entire LayerZero holdings. Usually, when the team offloads during a downtrend, it signals a lack of confidence in the market.
Any impact on ZRO?
Notably, Alameda Research has sold ZRO several times before, and almost every time, it has sold near a local top.
For example, the last time the Alameda team sold these tokens, ZRO crashed from $2.10 to $1.50. This time, however, it seems the team sold later into the dip.
Following the latest sale, the token reacted aggressively, dropping over 6%. In fact, the selling pressure accelerated the altcoin’s downward momentum.
As such, the altcoin’s Relative Strength Index (RSI) dropped from 47 to 41, further stretching deeper into the bearish zone.
Source: TradingViewAt the same time, ZRO fell below its 50 and 100-day EMAs, further confirming the trend’s strength. Therefore, if the selling pressure, especially from large entities, persists, the downtrend is likely to strengthen.
Currently, ZRO is testing $1.8 support; if pressure intensifies and it fails to hold, the altcoin could slide towards $1.4.
LayerZero Buyers still remain active in the market
Although LayerZero has continued to decline, buyers have remained largely active during this period. Exchange activity further echoed this market demand.
Coinglass data showed that Spot Netflow has remained negative for over 30 consecutive days. At press time, the altcoin’s Netflow was -$609k.
Source: CoinGlassA sustained negative netflow suggested that buyers have outpaced sellers on exchanges. Traditionally, higher buyer presence has reduced supply, increasing scarcity and thus helping to stabilize prices.
Although the demand so far has failed to absorb the pressure, it gives the altcoin a lifeline and could offer significant support. If the market finally feels this demand and sellers are exhausted below $2, ZRO could rebound, reclaim $2, and target $2.2.
Final Summary
- Alameda Research returned after two months of dormancy and dumped 7.93 million ZRO worth $15.3 million.
- LayerZero [ZRO] dropped 8.42%, breaching $2 support, and touching a low of $1.83 amid rising selling pressure.
Source: https://ambcrypto.com/layerzero-drops-after-15mln-alameda-dump-more-pain-ahead-for-zro/
