LayerZero (ZRO) plummets amidst Alameda’s massive dump: What’s appening?

Alameda dumps its LayerZero ZRO

After two months of complete inactivity, the wallet linked to Alameda Research has struck hard once again in the crypto market. The entity transferred and sold 7.93 million ZRO tokens, with an estimated value of $15.3 million. This massive dump sent an immediate shockwave through the asset price, catching many traders holding long positions off guard.

At the time of writing, the price of ZRO is fluctuating in a range between $1.83 and $1.95, marking a severe 8.42% drop over the last 24 hours. This institutional selling pressure worsens an already fragile situation, as the token suffered a violent rejection below the $2.20 resistance the previous week.

Indeed, a bearish daily order block formed on February 11, and a bearish CVD divergence appeared on March 17. Following this rejection from the order block, ZRO could head back down towards its demand zone and 3 day order block around $1.22 in the coming months before it can break through its resistances.

Will Alameda selling pressure wipe out the ZRO support?

Historically, moves by Alameda Research have often dictated the short term trend for LayerZero. During their previous liquidation wave, the price of ZRO collapsed from $2.10 to $1.50. This time around, the sell off occurred while the asset was already starting a retracement, which literally accelerated the bearish momentum.

The technical impact is undeniable: the token violently broke the $2.00 psychological support to hit a local low at $1.83. Losing this key level now exposes ZRO to increased volatility, especially since buyers are struggling to absorb this sudden supply on the order books.

If whales continue to distribute their tokens, the market could witness a cascade of liquidations. Traders are closely monitoring the reaction in trading volumes to determine whether this downward move is just a temporary shakeout or the beginning of a real purge.

Are technical indicators confirming a bearish reversal?

Analyzing the daily charts leaves little room for doubt regarding the strength of the move. The RSI (Relative Strength Index) dropped sharply from 47 to 41, sinking dangerously into the selling zone. This deterioration highlights a clear dominance of the bears and the absence of an imminent market bounce.

In parallel, ZRO closed below its 50 and 100 day exponential moving averages (EMA). This technical breakdown is a strong signal for analysts: the underlying trend has reversed. Furthermore, the MACD is starting to cross downwards, confirming that the positive momentum is well and truly broken.

Without a quick buyback to push back above $2.00, the risk of a prolonged correction intensifies. Investors who were hoping for a new LayerZero surge will need to arm themselves with patience in the face of this degraded price structure.

How low can the LayerZero (ZRO) price fall?

The current setup puts LayerZero at a crossroads. In a bearish scenario, if the selling pressure persists and the $1.83 level gives way, the next downside target could bring the token back to its all time lows around $1.22. Such a drop would validate a severe capitulation cycle, pushing away any prospect of a breakout from its resistances between $2.35 and $2.80.

Conversely, to hope for a bullish scenario and reignite a rally, the bulls must absolutely defend the current zone and reclaim the breakout above $2.30. A daily close beyond this resistance could trap short sellers and initiate a relief bounce.

But for now, ZRO is showing bearish signals with a resistance rejection and a CVD indicating a capital outflow.

Sources:

• Tradingview
• Lookonchain
• AMBCrypto

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