Today, Layer has dropped from \$3.4 to below \$1.9 – a decline of over 44% in less than 24 hours. Meanwhile, the current funding rate is at -2% per hour, indicating that the short side is very aggressive and the market is extremely one-sided.
However, what is more noteworthy is: On May 11, 84 million tokens will be unlocked – an event that could create strong selling pressure. Based on current price behavior, I propose a hypothesis:
> Today's crash may just be a 'false bottom' attempt, aimed at creating a supply shortage mentality and paving the way for a technical rebound around \~\$2.45. This is very likely a 'liquidity trap' – where funds are drawn in before the unlock team dumps their holdings.
If that is the case, then the recovery zone is just the final bullish trap before Layer enters a deep decline and long-term accumulation phase.
This is when retail should be cautious of strong phantom pumps and bull traps from the market makers.
