ZORA’s recent price action suggests a complex setup that traders are watching closely. A post by More Crypto Online on February 15 highlighted a potential five-wave upward move followed by a three-wave pullback.
While the coin currently trades near the typical support zone for wave ii or wave b, experts warn that this area can be misleading. Many traders interpret this as a chance for a bullish bounce, but historically, what looks like a first five-wave impulse often ends up being a terminal corrective move.
In other words, for ZORA to demonstrate a bullish pattern, the price must remain above the beginning of the five-wave movement and form a higher low. Otherwise, the price may have temporary increases, and the initial movement could simply be a part of a larger downward trend.
It is also noted that being in a support zone is not enough, and the behavior of the market in this zone will determine whether a base is being formed or the downward trend will continue.
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ZORA Daily Chart Signals Strong Bearish Pressure
Technical analysis on TradingView indicates that the ZORA/USD pair is in a strong downtrend on the daily chart. Since late October, it has been making lower highs and lower lows, indicating strong selling pressure.
It is currently at $0.0210, which is significantly lower than the Bollinger Middle Line at $0.0239 and much lower than the Upper Band at $0.0301. The fact that the candles are touching the Lower Band suggests strong bearish momentum, and the recent attempts at a rebound have been weak.
The width of the Bollinger Bands widens as prices decline and narrows slightly during pullbacks, indicating that the volatility is derived from strong selling. The pullback statistics are at a very high level of 86.39% ranking, and the run-up statistics are nearly at zero, indicating that there is not much upside.
The RSI(14) is in the mid-30s, around 35, indicating that the momentum is still bearish but not oversold. Also, attempts to break above 50 have been unsuccessful.
Key Levels to Watch for Reversal or Breakdown
The first level of resistance is located near the Bollinger mid-band price of $0.0239, while the broader supply region of $0.026 to $0.030 is above it, corresponding to the top band and previous regions of the drop.
If ZORA continues to trade below $0.024 and the RSI fails to show a rebound, it is likely that selling pressure will be encountered on any attempt to rally. On the flip side, trading below $0.020 may test the recent low of $0.0177.
Read More: Zora Eyes Major Gains as Key Support Holds, Momentum Could Return Soon