Key takeaways
- LayerZero (ZRO) fell about 3% on Monday, extending last week’s 9% decline.
- The network is set to unlock 25.71 million ZRO tokens, equivalent to 4.6% of the total supply, increasing potential selling pressure.
- Despite bearish price action, futures trading volume surged 552%, reflecting heightened retail interest.
- Technically, ZRO remains in a downtrend, with support at $0.734 and a potential downside target near $0.532.
LayerZero (ZRO) extended its recent losses on Monday, falling roughly 4% as investors prepared for one of the project’s largest scheduled token unlocks.
The token has already declined about 9% over the past week, and the release of 25.71 million ZRO into circulation could add further selling pressure in the short term.
Although derivatives activity has surged ahead of the unlock, market positioning suggests traders remain cautious about the token’s near-term outlook.
Monthly token unlock adds supply pressure
According to Tokenomist data, LayerZero will unlock 25.71 million ZRO tokens on Monday, representing approximately 4.6% of the token’s total supply.
The newly unlocked tokens will primarily be allocated to strategic partners and core contributors.
At the same time, approximately 1.67 million ZRO, or 0.3% of the released supply, will be repurchased through a buyback program.
The planned buyback may signal confidence from the project’s core team, but the additional circulating supply is still expected to weigh on short-term price action as investors assess potential selling activity.
While institutional allocations are set to increase, retail traders have become increasingly active in LayerZero’s derivatives market.
Futures trading volume surged 552% over the past 24 hours to $248.65 million. Meanwhile, Open Interest (OI) increased 4.52% to $80.87 million, indicating new positions are entering the market.
The rise in both trading volume and Open Interest suggests growing speculation ahead of the token unlock.
However, sentiment appears to be shifting. Despite higher trading activity, perpetual futures funding rates have weakened.
The funding rate declined to 0.0061% from 0.0121% a day earlier, indicating demand for leveraged long positions is easing.
Lower funding rates often reflect reduced confidence among bullish traders, particularly before major token unlocks that increase circulating supply and create expectations of additional selling pressure.
The combination of rising speculative activity and weakening bullish positioning suggests investors remain cautious heading into the unlock event.
LayerZero price prediction: Bears remain in control
From a technical perspective, LayerZero continues to trade within a well-established downtrend.
The token remains below its 50-day Exponential Moving Average (EMA) near $0.957, reinforcing bearish momentum.
The outlook also remains negative following the death cross formed in late April, when the 50-day EMA crossed below the 200-day EMA—a signal often associated with sustained downward trends.
Technical indicators continue to support the bearish outlook. Relative Strength Index (RSI) reads around 36, indicating strong bearish momentum while remaining above oversold territory.
Both the MACD and signal lines remain below zero and continue trending lower, suggesting downside momentum persists.
These indicators show sellers continue to dominate despite increased derivatives activity.
The most important downside support remains at $0.734, the major structural support and Fibonacci anchor.
A decisive break below this level could accelerate selling and expose the next technical target at $0.532. Reaching this level would represent roughly 25% downside from current prices.
If buyers manage to regain momentum following the token unlock, the first resistance zone sits around $0.945 (23.6% Fibonacci retracement), with another hurdle at $0.957 (50-day EMA).
A daily close above this resistance cluster would reduce immediate bearish pressure and could open the door for a move toward $1.325.
However, reclaiming the 50-day EMA remains necessary before a broader recovery can develop.
