LayerZero drops 11% as long liquidations and token unlocks pile on

ZRO fell 11% to $0.74 as long liquidations surged and traders braced for the next token unlock, diverging from a 2% broader market gain.

"ZRO's breakdown below the $1.24 support level in June confirmed a bearish structure, and the selling pressure has only intensified since," Jason Wu, an independent on-chain analyst, said. "The combination of leveraged shorts and impending supply unlocks creates a difficult environment for any near-term recovery."

More than $512,000 in long positions were liquidated across exchanges in the past 24 hours, compared with just $5,770 in shorts — a ratio of roughly 10 to 1, according to Coinglass data. Cumulative short liquidation leverage stood at about $1 million between $0.799 and $0.885, while long positions totaled $378,500 between $0.700 and $0.783, indicating bears outweighed bulls by a 3x magnitude. The cumulative volume delta showed more than 142,000 ZRO tokens being sold at the time of writing, signaling that selling pressure was accelerating.

The token faces a recurring supply headwind. Every 20th of the month, LayerZero unlocks 25.71 million ZRO tokens — equivalent to 4.40% of the circulating supply of 363.28 million, according to Tokenomist data. The next unlock is scheduled for Aug. 20. Structurally, ZRO has been making lower highs since equaling its October peak of $2.593 on Feb. 11. It broke below the $1.24-to-$2.59 range in June and confirmed the breakdown with a double retest of the $1.24 level, which flipped from support to resistance. If the $0.740 zone fails to hold, the next major demand area sits at the Oct. 10 crash low of $0.310.

This article is for informational purposes only and does not constitute investment advice.