LayerZero (ZRO) is at a critical juncture as bearish pressure intensifies, pushing the token toward a pivotal support level of $1.35. After a 6% decline, ZRO now hovers near this key zone, with on-chain data and market structure signaling potential downside risks. The token briefly rebounded 5% to around $1.50, but technical indicators suggest the broader trend remains bearish.
On-chain analysis reveals that a wallet linked to the LayerZero ecosystem recently deposited 1 million ZRO (worth ~$1.43 million) into Binance, a move often associated with selling intent. The same wallet still holds approximately 29 million ZRO (~$41 million), raising concerns of further exchange inflows if market conditions worsen. Such activity near a support level can dampen buyer confidence and accelerate a breakdown.
Technical indicators reinforce the bearish outlook. ZRO is trading below its 20-day and 50-day moving averages, with a bearish crossover adding to downward momentum. The Relative Strength Index (RSI) sits near 36, close to oversold territory, while the MACD remains bearish. A bearish flag pattern on the daily chart suggests a potential continuation of the downtrend. Analysts note that unless ZRO reclaims the $1.48–$1.50 range and then the $1.60–$1.65 supply zone, the path of least resistance remains lower.
Liquidation data highlights a fragile market setup, with $480,000 in long liquidations versus just $6,130 in shorts, with most long liquidations from Hyperliquid. This imbalance suggests that a break below $1.35 could trigger a long squeeze, accelerating downside volatility.
Despite the bearish technicals, positive developments from LayerZero Labs may provide some support. The company pledged over 10,000 ETH to the 'DeFi United' recovery initiative following the $290 million Kelp DAO exploit. This includes donating 5,000 ETH directly and depositing another 5,000 ETH to bolster Aave market liquidity, with plans to deepen liquidity for Aave's GHO stablecoin. This strategic commitment reflects confidence in cross-chain bridging and DeFi resilience, but has not yet shifted ZRO's price action.
If $1.35 fails to hold, the next downside target is near $1.10–$1.00. Conversely, a successful defense of this level could allow for a relief rally toward $1.48–$1.50, but the trend remains firmly bearish until a stronger move above $1.60–$1.65 occurs.
