The price of LayerZero experienced a severe turnaround on Friday, wiping out any gains gained following its airdrop on Thursday.
After reaching a high of $4.57 this week, LayerZero fell to $3. The token’s market capitalization decreased to $745 million, below the $1 billion threshold, as it declined.
As anticipated, LayerZero’s price dropped during a significant sell-off in the cryptocurrency market, with most tokens dropping by double digits. Bitcoin went below the critical $64,000 support level, and the total market capitalization of all tokens decreased to $2.33 trillion.
Additionally, it dropped as the proof-of-donation system of LayerZero was attacked by its users during its airdrop. An innovative method of airdropping tokens required all claimants to give $0.1 to the Protocol Guild in order to obtain tokens.
When several users reported not getting their allocations, the ZRO token also crashed. The developers said in a statement that they have introduced a platform that allows users to challenge and adjust their allocations.
Furthermore, several ZRO grantees’ positions were liquidated at the time of this fall. Following the airdrop, most zkSync beneficiaries ditched their tokens, as we recently reported. ZRO’s behavior, however, was consistent with how most tokens trade following an airdrop, as we reported on Thursday.
For instance, soon after its airdrop, Sei increased to $0.2128, fell to a record low of $0.09, and then eventually rose to $1.04. In a similar manner, Sui started off at $1.4, fell to $0.3, and then shot up to an all-time high of $2.10 in less than a year. As a result, a few traders who had sustained significant losses insisted that they would keep their tokens and bide their time until a rebound.
The following few weeks’ cryptocurrency market performance will determine whether LayerZero’s price rises or falls. If Bitcoin sticks to its negative trajectory and breaks through $56,527, it may be low, but it will probably keep sliding.
Altcoins and Bitcoin typically correlate closely. For instance, when Bitcoin reached a record high in March, most altcoins surged to their all-time or multi-year highs. Then, as Bitcoin lost traction, they withdrew.
