Layer Zero (ZRO) is showing signs of a bearish turn after a week-long uptick, with indicators suggesting buyers are losing momentum. Quick snapshot - After a rally that produced gains of up to 45%, ZRO plunged about 14% in the last 24 hours. - Price has been trading inside a clear consolidation channel, bouncing between defined support and resistance levels. - A recent surge hit a major resistance zone and was promptly rejected—an area that has previously triggered extended drawdowns on at least six occasions (source: TradingView). Technical risk: how far could ZRO fall? - By averaging the magnitude of prior selloffs from similar rejections, ZRO could face downside of as much as ~43% if selling persists. - On the derivatives side, the ZRO perpetual market recorded roughly $233,000 in losses after the price failed to breach that upper resistance; further downside would likely generate additional pain for longs. Momentum and volatility signals - Bollinger Bands: ZRO recently pushed into the upper band (overbought territory), and the current pullback is consistent with a typical normalization toward the mid or lower band—levels that often act as stabilization zones (source: TradingView). - Parabolic SAR: dots have appeared above the price, a classic short-term bearish signal that often precedes further declines. - Accumulation/Distribution: total volume stands at a positive 57 million ZRO, indicating that, despite the pullback, broader participation remains constructive and the market structure retains a bullish tilt. Fundamental context: the token unlock - On January 19, the team unlocked 2.4% of total supply—equivalent to 11.3% of circulating float—worth about $46.74 million at the time. Token unlocks typically add selling pressure, but in this case both volume and price actually rose immediately after the unlock, signaling strong demand. - Meaningful selling pressure didn’t emerge until January 21, which suggests the current move may be a corrective pullback rather than a full bearish reversal. What to watch next - Key resistance that recently rejected price (and which has caused prior drawdowns) will be a critical level to breach for any renewed bullish push. - If selling accelerates, watch for a move toward the lower Bollinger Band as a possible stabilization/re-entry zone. - Conversely, rising volume with price recovery would help validate continued bullish interest. Bottom line Near-term indicators favor sellers, but on-chain participation and the post-unlock price action leave the broader narrative mixed. Market-wide shifts in risk appetite will likely determine whether ZRO’s pullback morphs into a deeper correction—or a brief retracement before the next leg up. Disclaimer: AMBCrypto's content is for informational purposes only and should not be considered investment advice. Cryptocurrency trading carries high risk; readers should do their own research before making decisions. © 2026 AMBCrypto Read more AI-generated news on: undefined/news