LRC, the native token that powers the leading layer 2 zkRollup protocol Loopring, was among the top ten cryptocurrency assets by trading volume among the top 500 Ethereum whales in the last 24 hours as the crypto winter continues in the new year.
Loopring is a protocol for creating non-custodial, orderbook-based decentralised exchanges (DEXs) on the Ethereum blockchain. It was dubbed the first zkRollup Layer 2 network.
As distinct communities and ecosystems formed around layer 2s on Ethereum in 2022, more people began to use them. Furthermore, these layer 2s offered significantly lower transaction fees than the Ethereum main chain, which aided in their adoption.
Increased inflation and a surge in liquidity exit from DeFi protocols resulted in a decline in DeFi total value locked (TVL) in 2022. Loopring, which was built primarily to house DEXes, did not escape the decline, as its TVL fell by 86% during the year, according to DefiLlama data.
Looopring was ranked fifth on L2Beat’s list of L2 protocols with the highest TVL, with a 1.89% market share of the L2 ecosystem.
Despite being among the top ten cryptocurrency assets by trading volume among the top 500 Ethereum whales in the last 24 hours, LRC’s performance was dismal.
According to CoinMarketCap data, the altcoin was trading at $0.1878 at the time of publication. However, an examination of its performance on the daily chart revealed that LRC was severely oversold at the time of publication.
Buyers cowered as they struggled to avoid the bears, giving coin distributors control of the LRC market.
The position of the LRC’s Directional Movement Index confirmed this (DMI). At press time, the sellers’ strength (red) was 34.33 points higher than the buyers’ (green) at 10.39 points. Furthermore, the Average Directional Index (yellow) was found to be in an uptrend, indicating that the token distribution trend has accelerated.
At press time, key momentum indicators such as the Relative Strength Index (RSI) and the Money Flow Index (MFI) were far from neutral, indicating that LRC was oversold. The RSI, for example, was found to be in a downtrend at 24.64. Similarly, the MFI was 31.30 at the time of publication.