Crypto trader spotted a massive bullish falling wedge on ZRO’s weekly chart and expects the falling prices to reverse. A popular trader who goes by the pseudonym Alex Clay spotted a huge falling wedge on the LayerZero token’s weekly chart and predicted a bullish reversal. Once the token reverses, he expects the price to first reach $5.5, then target $8, and finally reach $10. Supporting his bullish sentiment, the trader stated that ZRO was consolidating below the key zone and spotted a bullish divergence on the Relative Strength Index indicator, which signals an oncoming rally.
A bullish falling wedge is a chart pattern where the price moves down over time but the slope of the highs and lows converges, forming a narrowing, downward-slanting shape. Even though the price is dropping, the rate of decline slows, and each new low is smaller in magnitude than the last.
Inside the wedge, sellers slowly lose strength while buyers quietly build their positions. The volume usually goes down as the wedge gets bigger, which means there is less pressure to sell. Traders think this might be a sign that the market is about to turn around. A lot of volume breaking above the upper trendline usually starts a bullish run.
This pattern often shows up after a downtrend as a sign of exhaustion or during an uptrend as a break before the trend continues. The psychology is essentially: sellers are running out of steam, and buyers are preparing to take over. Once the sellers run out of gas, the buyers take over the market, driving the price up.
On the 2-hour chart, the setup is such that ZRO looks like it is about to reciprocate its bull rally in March. Given that the conditions are favorable and the bulls have the legs to take ZRO through, the token could reach above $3. However, the RSI line is menacingly close to the overbought zone, and if the RSI line heads over to this region, the market could correct the prices, and ZRO could lose value.
