• LayerAI increased by 81.92%, thanks to strong technical factors and the increase in Open Interest.
• On-chain activity and the unwinding of short positions suggest increasing market confidence in the momentum of LayerAI.

The cryptocurrency market has recently seen significant volatility, but LayerAI [LAI] is creating a buzz. This Token has surged by an astonishing 81.92% in a single day, trading at the level of $0.007600 at the time of writing.

This price surge has attracted the attention of both investors and analysts. So, what is driving this momentum, and can LayerAI sustain this growth?

Can LayerAI Maintain the Uptrend?

The price chart of LayerAI shows a strong rally in March 2025, where it broke through several resistance levels, pushing the price above $0.007.

The RSI indicator shows a bullish signal at 69.92 - a sign that the asset is in a strong momentum phase. However, after the peak, the price has corrected, suggesting the possibility of accumulation before the next leg up.

The key support levels to watch are $0.0048778 and $0.006000, while resistance has formed near the $0.0094507 area. If LayerAI can hold above the support levels, it may target higher prices in the coming weeks.

Source: TradingView

Surging Open Interest - What Does It Signify?

The Open Interest of LayerAI has surged by 143.39%, reaching $6.42 million. This sudden increase suggests that a significant amount of Capital is flowing into LAI Futures contracts, indicating the market's positive expectations. This clearly shows the market's bets on the next price action.

However, the strong increase in Open Interest can also signal higher market risks, especially if the price reverses. Therefore, traders should closely monitor the Open Interest level to assess the market sentiment.

Additionally, the on-chain data of LayerAI shows a significant increase in daily active addresses and trading volume. The number of daily active addresses has surged, reaching 54 at the time of writing - indicating increased activity on the network.

This growth is also accompanied by an increase in the number of transactions. The explosion of on-chain activity often indicates increased network usage and higher demand for LAI.

Source: Santiment

Long Positions vs. Short Positions - Who's Winning?

LayerAI has seen significant unwinding of short positions in the market, with short positions facing significant pressure. As of March 14, the unwinding of short positions reached $1.35 million on exchanges like Bybit and gate.io.

The rapid price increase has forced many short-sellers to exit their positions, further fueling the uptrend.

Currently, some long positions are also facing liquidation. However, the dominance of short position unwinding suggests that the bearish sentiment has been temporarily eliminated.

Source: Coinglass

Will LayerAI Continue to Grow?

The strong price action of LayerAI, supported by the increase in Open Interest, the rise in on-chain activity, and the dominance of short position unwinding, paints a bullish picture. However, the market may continue to be volatile in the short term, especially as the RSI suggests the Token may be approaching overbought levels.

Therefore, while this surge is promising, traders should be cautious and watch for signs of correction. If LayerAI can maintain above the critical support levels, it has the potential to continue its upward trend.