LayerZero (ZRO) is under renewed selling pressure, with the price falling towards $3.19 after a rejection at a key trendline. The edged decline has turned the market more bearish, raising fears of deeper declines. With the bears seemingly in control, all eyes are on whether ZRO will find support or continue to fall.

This article aims to analyze the recent bearish move of ZRO after the rejection of the trend line as the price falls towards the critical level of $3.19. We will look at key technical indicators, market dynamics and potential scenarios to provide investors and traders with insight into whether the downtrend will continue or if there may be signs of recovery on the horizon.

At the time of writing, LayerZero is trading at around $3.73, down 5.94%, with a market cap of over $410 million and trading volume of over $100 million. Over the past 24 hours, ZRO’s market cap is down 5.99% and trading volume is down 0.57%.

Market sentiment changes: LayerZero set for further declines

On the 4-hour chart, after successfully rejecting the trend line, LayerZero continued to gain in the red momentumfalling below the 100-day plain moving average (SMA) towards the $3.19 support level. The digital asset maintains a steady downward movement, which indicates that bears are in control and can push the price even lower.

Furthermore, analysis of the 4-hour Relative Strength Index (RSI) reveals that the signal line has fallen below 50% towards 35%, indicating a bearish market shift. This suggests that ZRO may continue to experience a downward move as momentum builds.

On the 1-day chart, after the rejection of the trend line, LayerZero shows promising negative signals marked by the formation of a significant bearish candle in the previous trading session. The rejection on the trend line indicates a bullish trend selling pressure that could bring the ZRO price down in the coming days as market sentiment remains bearish.

Finally, on the 1-day chart, the RSI signal line has fallen to 47%, falling slightly below the 50% threshold. This drop below 50% indicates that momentum is leaning towards the bearish side and could signal further downside movement in the ZRO price.

Key levels to watch: support or further downtrend for ZRO?

As LayerZero moves through a bearish phase, the $3.19 support level becomes crucial in determining its potential for a rebound or further decline. If ZRO holds above this key support, it could set the stage for a rally towards the $4.50 resistance level. If the price breaks through this resistance, it could rebound, targeting the next resistance point at $5.60 and potentially reaching even higher levels.

However, if the $3.19 support level is not maintained and the price falls below this threshold, cryptocurrency could encounter additional declines, potentially moving towards the $2.69 range. A break above this level could signal a more bearish trajectory, potentially testing even lower support levels.

Featured image from Adobe Stock, chart from Tradingview.com