$LAYER just dropped ~40%, shaking many traders who saw it climbing just days ago. Despite its recent gains, the price has sharply corrected—and here’s why it’s declining.

One major reason is its fragile supply structure. Only 21% of the total supply is in circulation, while the rest remains locked. A small group of top holders controls most of the tokens, and a recent transfer of 6.9M #layer to #Binance raised concerns of a potential dump, spooking the market and likely triggering panic selling. At the same time, unusual shorting activity and pressure in perpetual markets suggest that coordinated selling or exits by large players could be underway.

The technicals don’t paint a brighter picture. Momentum is fading—4-hour RSI is down at 45, MACD has flipped negative, and volume is decreasing during rallies. These indicators point to weak buyer conviction, adding to the pressure and making the token vulnerable to even moderate sell-offs.

Even though LAYER surged over 17% last week, outperforming much of the market, its 24-hour volume fell nearly 25%, and it’s already seen a 5% daily loss. This suggests that the earlier rally may have been unsustainable. Without strong fundamental support or demand, the combination of whale influence, technical weakness, and low circulating liquidity all contributed to the current decline.