1. Token Unlock and Increase in Supply: LAYER has seen a unlocking of a large number of tokens, leading to an increase in supply in the market. This sudden expansion in supply may have prompted some whales (large investors) to sell large quantities of tokens, negatively impacting the price.
2. Unbalanced Distribution Structure: Only about 21% of the total supply of LAYER is currently circulating, while the rest remains locked. This means that a few whales control a large portion of the tokens, making the market susceptible to significant fluctuations when they sell.
3. Unusual Trading Activity and Pressure in Future Markets: Intense selling activity and pressure have been observed in perpetual markets, suggesting the possibility of coordinated sell-offs or exits by major market players.
4. Weakness in Technical Indicators: Technical indicators indicate weakness in buying momentum, as the Relative Strength Index (RSI) has dropped to 45, and the Moving Average Convergence Divergence (MACD) has turned negative, along with a decrease in trading volume during upswings, indicating a lack of confidence among buyers.
Is there a chance for recovery?
Despite the sharp decline, some analyses indicate that the current price is close to the lowest point in 24 hours, which could lead to a short-term rebound. However, the overall sentiment in the market tends towards greed, which may lead to additional volatility.
Advice for Investors
Given the high volatility and current instability in the price of LAYER, investors are advised to exercise caution and closely monitor the market before making any investment decisions. It may be wise to wait for price stabilization and the emergence of positive technical signals before entering any new trades.
