LayerZero Price Experiences Significant Downturn Amid Traders Optimism for Rebound
In a dramatic turn of events last Friday, LayerZero’s valuation took a steep dive, negating the previous day’s gains that followed its much-anticipated airdrop.
The value of LayerZero tumbled to **$3**, a stark contrast from the week’s peak of **$4.57**. This decline saw the token’s market capitalization shrink to **$745 million**, dropping below the coveted **$1 billion** threshold.
**LayerZero Price Chart**
The downturn in LayerZero’s price, which aligned with our forecast, occurred amidst a widespread downturn in the cryptocurrency market, with a majority of tokens experiencing double-digit percentage losses. Bitcoin, the leading cryptocurrency, fell beneath the crucial **$64,000** support level, and the combined market capitalization of all cryptocurrencies plummeted to **$2.33 trillion**.
The drop was further exacerbated by criticism from LayerZero’s community regarding its proof-of-donation model implemented during the airdrop. To claim their tokens, recipients were required to contribute **$0.1** to the Protocol Guild, marking a unique twist on traditional airdrop strategies.
The ZRO token faced additional pressure as several users voiced concerns over not receiving their expected share. Addressing this, the developers released a **statement** announcing the launch of a platform designed to review and rectify allocation discrepancies.
Moreover, the decline was compounded by actions of some ZRO holders who chose to liquidate their stakes. As previously reported, a significant number of zkSync airdrop beneficiaries liquidated their tokens soon after receiving them.
Despite this, as noted in our Thursday report, ZRO’s trajectory post-airdrop mirrors the typical pattern observed with most tokens. For instance, Sei’s value initially surged to **$0.2128** post-airdrop, plummeted to an all-time low of **$0.09**, and subsequently climbed to **$1.04**.
In a similar vein, Sui’s price initially escalated to **$1.4**, then dropped to **$0.3**, before soaring to a record high of **$2.10** in under a year.
Consequently, several traders who have incurred substantial losses are opting to retain their tokens in anticipation of a market rebound.
The potential recovery of LayerZero’s price is closely tied to the broader cryptocurrency market’s performance in the upcoming weeks. Should Bitcoin persist in its downward trajectory and breach the **$56,527** mark—its lowest in May—the decline is likely to continue.
Altcoins typically exhibit a strong correlation with Bitcoin’s performance. For example, numerous altcoins reached new multi-year or all-time highs when Bitcoin achieved its peak in March, only to retract as Bitcoin’s momentum waned.
