LayerZero: Assessing if ZRO is ready to explode this altcoin season

• ZRO showed a promising uptrend after witnessing a bullish crossover on 20, 50-day EMA.
• Buyers should look for a close above the long-term trendline resistance to gauge ZRO’s upside potential.

LayerZero [ZRO] saw a strong breakout from a classic falling wedge pattern on its daily chart, bouncing from near the $3 support level. Following this breakout, ZRO has rallied by nearly 50% in just 20 days, reaching a critical resistance area around the $4.5-$4.7 range.

At the time of writing, ZRO was trading at around $4.5, up by 22% in the last 24 hours. The price action currently hovered around a crucial confluence of resistance levels, with buyers attempting to sustain the upward momentum.

ZRO could consolidate if the altcoin season doesn’t kick in

Source: TradingView, ZRO/USDT

The price chart revealed that the recent uptrend led ZRO to test the resistance near the $4.5-$4.7 range. The 20-day EMA (currently at $3.8) has jumped above the 50-day EMA ($3.76), signaling a bullish crossover that typically indicates rising buying pressure.

If the bulls manage to maintain the momentum and close above the current resistance zone, ZRO could extend its rally toward the $5 psychological resistance. However, a failure to close above this range may lead to a period of consolidation or a short-term pullback toward the $4 support level.

The Relative Strength Index (RSI) stood at around 65 at press time. This indicated healthy buying pressure but falling short of overbought levels. If RSI continues its move upward and breaks above the 70 mark, it could suggest further bullish strength.

On the other hand, any downturn in RSI could signify a weakening trend, increasing the chances of a near-term consolidation.

CoinMarketCap’s Altcoin Season Index was neutral at the time of writing. Buyers can keep a close eye on this index, as a jump above the 50 level can hint at the start of the altcoin season.

ZRO derivatives analysis

Source: Coinglass

ZRO’s trading volume has jumped by 110.17% to reach $353.69 million, showing high investor interest. Open Interest has also gone up by 20.72%  (at nearly $68.15 million), which means traders are still actively opening new positions and expect the rally to continue.

In the last 24 hours, the long/short ratio for ZRO/USDT was at 0.9543 to indicate a balanced sentiment. On Binance, the long/short ratio for regular accounts is 1.9958, while top traders were feeling pretty optimistic with a long/short ratio of 2.5676.

Traders are advised to monitor Bitcoin’s broader market sentiment, as it could influence ZRO’s price action, especially as ZRO approaches key resistance areas.