ZORA, the intrinsic token of Base’s specialized layer-2 NFT solution chain, has seen a significant 25% increase after its recent launch. The surge in the token's value was driven by the growing popularity of "content coins," which boosted its visibility in the market. Even though there was initial excitement, concerns about its sustainability over the long term have started to surface.
The Chaikin Money Flow (CMF) indicator indicates a decline, suggesting that there are more outflows than inflows for ZORA. This imbalance, with the CMF below the zero line, indicates that more capital is leaving the token than entering it. This activity is troubling for a new token like ZORA, as it hints that investors might be focusing on short-term gains rather than long-term usefulness.
The initial hype surrounding ZORA due to its ties to Base's NFT ecosystem may be diminishing. The lack of consistent inflows implies that traders might be quick to offload their holdings once the speculative interest subsides. Without a solid use case, it may be challenging for the token to sustain its value in the foreseeable future.
Despite a 14% drop in market capitalization from $68 million to $58 million in a short period, Base founder Jesse Pollock has emphasized the growth potential of "content coins" on Base, suggesting that the overall ecosystem still harbors expansion possibilities. Although the decline in market capitalization signals negative sentiment towards ZORA, the broader market for content coins within Base remains promising.
As for the current price of ZORA, standing at $0.023, it reflects a 6% decline in the last hour. The token is currently hovering between the resistance level of $0.0269 and the support level at $0.0215. Continued downward movement could lead to further decreases, potentially dropping to $0.0215 or even $0.0187, causing apprehension among existing and prospective investors.
However, a breakthrough above the $0.0269 resistance level could push ZORA towards $0.0300, indicating renewed investor confidence and validating the earlier 25% price hike.