LayerZero price suffered a harsh reversal on Friday, erasing all gains made on Thursday after its airdrop.

LayerZero plunged to $3, down from this week’s high of $4.57. As it dropped, the token’s market cap fell below the $1 billion mark at $745 million.

LayerZero price chart

LayerZero’s price, which we predicted, happened as the crypto industry went through a major sell-off with most tokens falling by double digits. Bitcoin dropped below the key support of $64,000 while the market cap of all tokens fell to $2.33 trillion. 

It also dropped as LayerZero’s users blasted its proof-of-donation mechanism during its airdrop. All token claimants had to donate $0.1 to the Protocol Guild to claim tokens, a novel approach to airdrops.

ZRO token also crashed as some users complained that they had not received their allocations. In a statement, the developers noted that they had launched a platform to appeal and correct their allocations. 

Further, this decline happened as some ZRO recipients liquidated their positions. As we reported recently, most of the zkSync recipients dumped their tokens after the airdrop.

Still, as we wrote on Thursday, ZRO’s performance was in line with how most tokens trade after their airdrop. For example, Sei rose to $0.2128 shortly after its airdrop, dropped to a record low of $0.09, and then eventually rallied to $1.04. 

Similarly, Sui initially rose to $1.4 then tumbled to $0.3, and then jumped to an all-time high of $2.10 within less than a year.

Therefore, some traders who have suffered heavy losses maintained that they will hold their tokens and wait for a recovery. 

Don’t want to make the same mistake with $ZRO as I did with $W, but < $3B FDV seems cheap if/when the market gets hot again

Difference with $W is I was adding from $12b to $7b hoping for the “airdrop fractal” pump

Buying cheaper than the latest VC round doesn’t seem like a… pic.twitter.com/XPEf7AcgEa

— Blur (@BlurCrypto) June 21, 2024

LayerZero’s price rebound will depend on how the crypto market performs in the next few weeks. It will likely continue falling if Bitcoin maintains its bearish trend and crosses $56,527, its lowest point in May. 

Altcoins tend to have a close correlation with Bitcoin. For example, most altcoins soared to their multi-year or all-time highs as Bitcoin hit its record high in March. They then retreated as Bitcoin lost momentum.