LayerZero price suffered a sharp reversal on Friday, erasing all the gains made on Thursday after the airdrop.
LayerZero fell to $3, down from this week's high of $4.57. As it declined, the coin's market cap fell below $1 billion at $745 million.
LayerZero price chart
LayerZero price we expected, This happened when the cryptocurrency industry witnessed a massive sell-off with most of the tokens falling by double digits. Bitcoin fell below the key support level of $64,000 while the market cap of all tokens fell to $2.33 trillion.
It also dropped when LayerZero users criticized the donation proof mechanism during the airdrop. All token claimants had to donate $0.1 to the Protocol Guild to claim tokens, a new approach to airdrops.
The ZRO token also crashed as some users complained that they were not receiving their allocations. in statementThe developers indicated that they have launched a platform to appeal and correct their customizations.
Furthermore, this decline occurred when some ZRO beneficiaries liquidated their positions. As we recently reported, most zkSync recipients dumped their tokens after the airdrop.
However, as we wrote on Thursday, ZRO's performance was in line with how most tokens traded after its airdrop. For example, Sei rose to $0.2128 shortly after the airdrop, fell to a record low of $0.09, and eventually rose to $1.04.
Likewise, Sui initially rose to $1.4 and then fell to $0.3, then jumped to an all-time high of $2.10 in less than a year.
Therefore, some traders who suffered huge losses assured that they would hold their tokens and wait for the recovery.
LayerZero price recovery will depend on the performance of the cryptocurrency market in the next few weeks. It is likely to continue to decline if Bitcoin maintains its downward trend and surpasses $56,527, the lowest level in May.
Altcoins tend to be closely related to Bitcoin. For example, most altcoins rose to multi-year or all-time highs with Bitcoin hitting a record high in March. They then retreated after Bitcoin lost momentum.