LayerZero's ZRO token fell about 3-4% on Monday, adding to a 9% decline from the previous week. The drop comes as the network prepares to unlock 25.71 million tokens — 4.6% of the total supply — later in the day. Most of those tokens are headed to strategic partners and core contributors.
What the unlock means
The scheduled release of 25.71 million ZRO is the main event for traders this week. While the unlock itself was planned, the market is reacting to the potential for increased selling pressure. A smaller portion — roughly 1.67 million tokens, or 0.3% of supply — will be repurchased through a buyback program, which could offset some of the selling. But the broader sentiment remains cautious.
Futures activity spikes
Futures trading volume surged 552% to $248.65 million in the past 24 hours, signaling heightened interest. Open interest also rose 4.52% to $80.87 million. Yet the perpetual futures funding rate dropped from 0.0121% to 0.0061%, a sign that demand for leveraged long positions is cooling. That shift suggests traders are less willing to bet on a quick rebound.
Technical picture turns bearish
ZRO is trading below its 50-day exponential moving average near $0.957, confirming bearish momentum. A death cross formed in late April when the 50-day EMA crossed below the 200-day EMA, a classic bearish signal. The relative strength index sits around 36, indicating strong downward pressure but not yet oversold territory. The MACD and its signal line are both below zero and trending lower, pointing to persistent downside momentum.
Key price levels to watch
On the downside, immediate support is at $0.734. A break below that could open the door to $0.532 — a potential 25% drop from current levels. On the upside, the first resistance is at $0.945, which aligns with the 23.6% Fibonacci retracement, followed by the 50-day EMA at $0.957. A daily close above that $0.945–$0.957 zone would reduce bearish pressure and could set up a move toward $1.325.
Whether the unlock triggers a deeper selloff or the buyback absorbs enough supply will become clearer in the next few trading sessions. For now, the $0.734 support level is the line in the sand.
