LayerZero's token ZRO continued its decline on Monday, with a cumulative drop of nearly 9% over the past week. Market attention was focused on a large token unlock scheduled for the day. As new tokens entered the market, short-term selling pressure was expected to intensify.
The unlocked amount represents 4.6% of the total supply.
According to Tokenomist data, LayerZero will unlock 25.71 million ZRO tokens, representing approximately 4.6% of the total token supply. This is one of the larger scheduled unlocks for the project.
The newly released tokens will primarily be allocated to strategic partners and core contributors. Simultaneously, the project will also repurchase approximately 1.67 million ZRO tokens through a buyback program, representing about 0.3% of the total released tokens.
Although the buyback action sends a certain support signal, from the supply side, the market still needs to digest the new selling pressure after more tokens enter circulation.
Contract trading intensifies, bullish sentiment weakens.
With the unlock date approaching, ZRO derivatives trading has seen a significant surge. CoinGlass data shows that in the past 24 hours, ZRO futures trading volume rose to $248.65 million, an increase of 552%.
Meanwhile, open interest rose to $80.87 million, an increase of 4.52% from the previous day. This typically indicates new positions entering the market, with traders increasing their bets around the unlocking event.
However, funding rates did not rise in tandem. The funding rate for perpetual contracts fell from 0.0121% the previous day to 0.0061%, indicating a slowdown in demand for leveraged long positions. The simultaneous occurrence of active trading and declining funding rates reflects a cautious outlook on short-term trends, despite frequent trading.
The key support level is at $0.734.
From a price perspective, ZRO remains in a downward trend. The report notes that the token is currently below its 50-day exponential moving average at approximately $0.957, indicating that the short-term weakness has not yet reversed.
If the price breaks below the key support level of $0.734, it could fall further to around $0.532. If buying interest picks up after the price unlocks, the $0.945 to $0.957 range will become the first major resistance zone.
Overall, the increased supply resulting from the unlocking remains the most pressing factor in the current market, while derivatives data shows that the rise in trading activity has not significantly improved bullish sentiment.
