LayerZero [ZRO] saw a 29% spike in Open Interest and a 132% increase in daily trading volume in the past 24 hours. The short-term volatility meant that ZRO was down 0.95% over the previous day, but had reached a local peak of $1.308.
Since reaching this local high, the altcoin retraced by 12% within 12 hours. At the time of writing, it had ceded control of a notable short-term demand zone.
AMBCrypto took a closer look at its price trends to understand if traders should look to buy or sell.
ZRO is still operating within a higher timeframe downtrend
The Open Interest spike since the 3rd of June came alongside ZRO’s move beyond the $1.16-$1.18 resistance zone it had been trapped under in the past week of trading.
The increased Open Interest and trading volume, alongside fundamental developments, appeared to justify the bullish breakout and signaled that further gains were possible.
Yet, looking at the 1-day timeframe, we can see a clear bearish trend for LayerZero. The token has made lower highs and lower lows since the final week of March. The range formation’s low at $1.46 (purple) was relinquished in the first half of May.
The current bearish swing structure’s latest impulse move downward was from $1.395 to $1.066. Using these levels, a set of Fibonacci retracement levels was plotted.
It highlighted the $1.269-$1.325 area as the golden pocket from where a bearish continuation can be expected. The recent, high trading volume rally into this supply zone, followed by a quick rejection, appeared to confirm the bearish bias.
ZRO traders’ call to action – Sell
The $1.15 area, highlighted in cyan, has been an important resistance over the past week. Briefly, ZRO bulls flipped it to support, but were unable to maintain control of this region.
The price action in recent hours, combined with the higher timeframe foray into the golden pocket around $1.30, meant that traders can look to sell ZRO.
The immediate price targets are $1.06 and $0.98, with $0.86 being a target in case of a sustained bearish run.
Final Summary
- LayerZero broke out past a local resistance zone on high trading volume and drew sizeable speculative interest.
- This bullish breakout did not last long and has already begun to reverse at press time.