LayerZero's token ZRO tumbled over 11% within the last day, a stark contrast to gains seen in Bitcoin, Ethereum, and Ripple.
The drop happened even though LayerZero’s mindshare rose by 28%, fueled by its recent partnership with Near Protocol. Despite growing attention and 3,460 engagements, bearish signs dominated the price action.
ZRO hit a peak near $2.59 on February 11 but has since been forming lower highs and eventually broke below a key support zone between $1.24 and $2.59. This breakdown was confirmed after retesting the $1.24 level twice, which now acts as resistance. The token seems to be heading toward the October 10 low of $0.31, a level set during a sharp crypto market downturn. Buy orders have triggered large long liquidations, indicating significant long squeezes, while selling pressure, shown by token sales exceeding 142,000 ZRO, intensified.
LayerZero’s long liquidations reached $512,000 with only about $5,770 wiped from short positions, showing bulls are losing ground rapidly. Short positions enjoy roughly three times more use than longs, amplifying the downward moves. On top of that, LayerZero faces recurring token unlocks every 20th of the month, releasing about 25.7 million ZRO tokens over 4% of the circulating supply contributing to ongoing selling pressure.
The combination of structural weakness, liquidations, and token unlocks points to more downside ahead, especially if ZRO falls below $0.74. While it currently consolidates with repeated tests of a support zone, the chances of breakdown appear high.
This content is for informational purposes only and does not constitute financial advice.
