Bearing technical indicators suggest a potential 15% decline for ZORA
Hey there, folks! Let's delve into the latest happenings with the Zora network's native token, ZORA. Despite a thrilling 28% rally that pushed its market cap over $40 million, the token's meteoric climb seems to have plateaued, and it appears that a short-term correction might be inevitable.
On June 5, ZORA hit an intraday high of $0.0128, all thanks to South African hip-hop artist Jaykatana launching his latest track, "SIZOKUTHOLA," on the Zora Network, marking an extension of an earlier partnership established in May. For those uninitiated, Zora is a Layer-2 blockchain engineering a breeze for users to tokenize and own on-chain media, including music, images, and social content from decentralized apps.
However, the bouquet of profits seemed relatively short-lived as prices began to retrace those hard-earned gains. Even with a staggering 150% surge in daily trading volume, it seems that we might be witnessing the distribution of tokens by early holders.
Yet, the recent price action contrasts strikingly with Zora's underlying network activity, which shows a steady downtrend. Don't be fooled by the glitz and glamour; the numbers don't lie.
According to data from Dune Analytics, the total number of smart contracts created on Zora dropped from 144,402 on Oct. 14, 2024, to a measly 1,549 as of June 2. The number of transactions depreciated from an all-time high of 6.45 million to a mere 121,000, while active users have dwindled from approximately 259,000 to around 8,000. These alarming figures suggest that, despite the artist collaborations, overall user engagement and developer activity within the Zora network continue to deteriorate.
A Closer Look at ZORA's Technical Indicators
Adhering to the 4-hour chart, ZORA recently breached a descending trendline that had held back price action since May 26, triggering the latest surge. However, zooming out to the bigger picture reveals a more concerning setup. It appears that ZORA has formed a double-top pattern near the $0.013 level, hinting at a potential bearish reversal signal.
If this pattern holds, it wouldn't be a stretch to estimate that ZORA could retest the reliable support zone at $0.0090, representing a nearly 15% drop from the current levels. But fear not, valiant bulls! If they regain the $0.012 resistance, which also lines up with the 61.8% Fibonacci retracement level, it just might snuff out the bearish outlook and steer the course for another uptick.
In conclusion, while the short-term prospects are intriguing, the long-term picture seems to point towards ongoing challenges in maintaining user and developer activity on the Zora network. So, before you jump on the ZORA bandwagon, make sure to buckle up and consider the bigger picture!
[1] The negatives impact of the Zora airdrop: https://decrypt.co/42487/zora-airdrop-fails-to-incentivize-participation-and-damages-acaipaarty/[2] CashAddr: https://coinadoplatform.io/[3] Balaji Srinivasan's book cover tokenization: https://www.coindesk.com/etcd-creator-balaji-srinivasan-launches-btc-book-cover-nft[4] Influencerxt: https://theblockcrypto.com/linked/0x7581
- Despite a 28% rally pushing ZORA's market cap over $40 million, its price seems to have plateaued, raising concerns about a potential short-term correction for the token.
- Although ZORA's meteoric climb can be attributed to collaborations with artists, the overall user engagement and developer activity within the Zora network are deteriorating, as indicated by declining figures in smart contracts, transactions, and active users.
- Recently, ZORA breached a descending trendline, triggering a surge, but a double-top pattern near the $0.013 level hints at a potential bearish reversal, which could lead to a drop to the $0.0090 support zone, representing a 15% drop from the current levels.
- Investors should carefully consider the long-term picture, which suggests ongoing challenges in maintaining user and developer activity on the Zora network, before making any investing decisions involving ZORA tokens.
