ZORA, the native token of Base’s dedicated layer-2 NFT solution chain, has experienced a notable surge of 25% following its recent launch.
The token gained significant attention due to the rising trend of “content coins,” which amplified its prominence in the market. Despite the initial excitement, however, concerns about its long-term viability are emerging.
ZORA Struggles To Find Investors
The Chaikin Money Flow (CMF) indicator shows a downtick, suggesting that outflows dominate the inflows. The CMF’s position below the zero line points to an imbalance, where more capital is leaving the token than entering it.
This behavior is concerning for a newly launched coin, as it suggests that investors may have used ZORA for short-term profits rather than long-term utility.
The initial excitement around ZORA’s launch, fueled by its connection to Base’s NFT ecosystem, may be fading. The lack of sustained inflows indicates that traders may quickly sell their holdings once the speculative wave subsides.
Without a strong use case, it could be challenging for the token to maintain its value in the long run.
ZORA’s market capitalization has seen a 14% decline, dropping from $68 million to $58 million in a short span. This decline aligns with the outflows observed, supporting the argument that investors are pulling funds from the token.
Despite this, Base creator Jesse Pollock highlighted the strong growth of “content coins” on Base, which could imply that the overall ecosystem still has potential for expansion. While the market capitalization drop indicates negative sentiment towards ZORA, the broader market for content coins built on Base remains promising.
ZORA Price Needs A Boost
At the time of writing, ZORA’s price stands at $0.023, reflecting a 6% decline over the last hour. The content coin facilitator is currently caught between the resistance of $0.0269 and the support at $0.0215.
If this trend continues, the token may experience further decline, possibly falling to $0.0215 or even $0.0187. This could create further concerns among existing and potential investors.
However, if ZORA manages to breach the $0.0269 resistance level, it could rise toward $0.0300. Such a move would signal renewed investor confidence and possibly validate the 25% price surge seen earlier today.
Disclaimer
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