LayerZero (ZRO) Holds Below $3, Breakout From Descending Channel Likely

Key Takeaways

• Descending channel breakout attempt in progress
• Fibonacci levels provide key resistance zones
• Elliott Wave suggests a potential bullish reversal

ZRO appears to be at a pivotal point, as shown in the 4-hour and 1-hour charts. The broader trend has seen a substantial correction, with Elliott Wave analysis indicating a completed five-wave decline.

The recent price movement suggests a potential reversal, but confirmation is needed.

Fibonacci retracement and extension levels provide critical resistance and support zones, defining the likely price trajectory.

ZRO Price Analysis

The 4-hour chart of ZRO shows a prolonged downtrend, structured as a completed five-wave decline, with the final wave (v) marking a significant low near $2.10 on Feb. 3.

The price has recently rebounded and is consolidating at a key horizontal resistance zone near $2.98.

This area coincides with the initial starting point, making it a critical inflection point for further upside confirmation.

A descending channel has governed price action since December, with the latest price breakout attempt aligning with the potential beginning of a new upward impulse.

However, a true breakout above the descending trendline remains unconfirmed, as price action has yet to sustain above key resistance levels.

Momentum indicators such as the Relative Strength Index (RSI) show a recovery from oversold conditions, suggesting buyers are stepping in.

However, the RSI has not reached overbought levels, indicating room for further upside if resistance levels break convincingly. 

A strong close above $3.19 would confirm a bullish breakout, while rejection at this level could result in another retest of the $2.49 support zone.

ZRO Price Prediction

The 1-hour chart reveals more granular details on ZRO’s near-term price movements. A smaller-degree Elliott Wave count suggests that price action attempts to establish a new five-wave impulse to the upside.

The initial breakout structure has completed waves (i) and (ii), with wave (iii) now in development.

If this wave extends beyond the 1.618 Fibonacci extension ($3.85), it would confirm a strong bullish continuation.

Conversely, failure to break resistance at the descending trendline could trigger a retracement, likely retesting the $2.75 (0.236 Fibonacci) or $2.56 (local horizontal support).

A deeper drop below $2.49 would invalidate the bullish count, signaling a continuation of the downtrend.

On the bullish side, the Fibonacci extensions project a potential wave (v) target near $4.16 (2.0 extension) and $4.95 (3.0 extension).

The RSI on the hourly timeframe shows slight overextension but remains in a healthy range, suggesting that momentum is still building.

If the price sustains above $3.19 and confirms a breakout, a rally toward the $3.58–$3.85 range is likely, with further upside potential if buying volume increases.

However, failure at current resistance levels could lead to another corrective leg before the next breakout attempt.

Key Levels to Watch

• Immediate Resistance: $3.06 (0.618 Fibonacci).
• Key Resistance: $3.19 (0.786 Fibonacci).
• Short-Term Bullish Target: $3.85 (1.618 Fibonacci extension).
• Major Bullish Target: $4.16 (2.0 Fibonacci extension).
• Immediate Support: $2.87 (0.382 Fibonacci retracement).
• Critical Support: $2.49 (wave (v) low, invalidation level).