LayerZero: Can ZRO reclaim $2.50 amid $24M whale swap?

Since recovering from a $1.3 decline, LayerZero [ZRO] has made substantial gains, reaching a high of $2.59. Shortly after reaching these levels, ZRO retraced to a low of $2.05.

At the time of writing, ZRO traded at $2.071, down 11.61% on the daily charts. Before this price dip, ZRO had been on an upward trajectory, hiking 21% on the weekly charts. 

Is this the start of something big for LayerZero or a mere speculative bounce?

LayerZero’s Layer1 drives market demand

ZRO reached a high of $2.5 on February 11 following the team’s announcement of the launch of Layer1-Zero.  Zero indicators for 100x breakthroughs across storage (QMDB), compute (FAFO), networking (SVID), and zk proving (Jolt Pro).

It combines four technical breakthroughs to create exceptional performance and interoperability. Following the announcement, investors, both individuals and institutions, rushed into the market to secure strategic positions. 

In fact, ZRO saw 32.47 million in Buy Volume compared to 30.2 million in Sell Volume over the past 24 hours as of writing.

During this period, the altcoin recorded the highest Buy-Sell Delta, exceeding 2 million across all major exchanges. A positive delta signaled increased demand for the asset, a prelude to higher prices. 

Alameda adds $24M worth of ZRO

Institutional investors have also joined the trend, committing significant capital.

A collaboration between LayerZero and ARK Invest, highlighted by Cathie Wood’s appointment to the advisory board, helped incentivize participation and strengthen investor confidence.

One such institutional investor was Alameda. According to Lookonchain, Alameda’s bankruptcy wallet swapped 129.04 million STG, worth $24.49 million, for 11.14 million ZRO, valued at $24.29 million.

Alameda’s swap of STG for ZRO signaled major confidence in the asset, as it was perceived as a more promising alternative. 

What’s next for ZRO?

LayerZero surged as demand rose following positive news about the Layer1 and ARK Invest partnership. At the same time, ZRO retraced as market demand cooled and profit-taking took over.

In fact, on the 11th of February, the altcoin’s spot Netflow climbed to a record high of $6.16 million, a trend that has persisted. At press time, Net Inflow was $3.23 million, indicating higher inflows.

Often, higher inflows accelerate downside risk, thus driving prices down. Despite increased profit-taking, the uptrend structure remains intact, and ZRO remains within the ascending channel.

More importantly, the altcoin remained above its short- and long-term Moving Averages (20-, 50-, 100-, and 200-day EMAs), indicating strong upside.

Additionally, its Relative Strength Index (RSI) was in the bullish zone at 61, reflecting a bullish market bias.

These market conditions indicate favorable sentiment for ZRO and suggest a recovery from the retracement and potential upside continuation.

Therefore, among the trend-resuming pairs, LayerZero will reclaim $2.5 and target the $3.01 resistance level. However, if profit takers overwhelm the market and demand fails to absorb the pressure, EMA 20 and 100 will act as support at $1.8.

Final Thoughts

• Alameda swapped 129.04 million STG, valued at $24.49 million, for 11.14 million ZRO, valued at $24.29 million.
• LayerZero [ZRO] retraced from $2.5, falling 11.6% to $2.071 amid rising profit-taking.