• Home
• News
• ZRO Falls 12% After Monthly Token Unlock as Market Cap Shrinks

ZRO Falls 12% After Monthly Token Unlock as Market Cap Shrinks

ZRO Falls 12% After Monthly Token Unlock – Market Cap Drops as Holders Decline and Spot Buyers Accumulate

Key Takeaways

• ZRO declined 12% within 24 hours amid renewed selling pressure.
• Approximately 32.6 million tokens, valued at $52.25 million, unlock on the 20th of each month.
• The token previously fell 54% over twelve weeks before rebounding 114% between late December and mid February.
• Market capitalization dropped from $592.16 million to $482.72 million, a decrease of $109.44 million.
• Spot markets recorded $2.67 million in net inflows over 48 hours despite the price decline.

Price Reversal Follows Short Term Recovery

LayerZero’s native token ZRO has entered another phase of weakness after a recent recovery failed to hold. Within 24 hours, the asset fell 12%, extending a broader pullback that has developed over the past two weeks.

The current downturn follows a period of significant volatility. After reaching a local high around 6 October, just before a broader market correction that affected major cryptocurrencies including Bitcoin, ZRO moved into a prolonged decline. Over the following twelve weeks, the token lost 54% of its value, establishing a sustained bearish structure.

A reversal began during the week ending 29 December. Buyers regained control and drove a six week recovery that lasted until 16 February. During that period, ZRO rallied 114%, fully recovering its earlier losses and restoring a short term bullish structure.

That recovery has now faded. Over the past two weeks, the token has dropped 10%, with the most recent 12% daily decline reflecting intensified selling activity. The shift in structure suggests that sellers have regained control after the earlier rebound.

Recurring Token Unlock Adds Structural Supply Pressure

Fundamental factors are reinforcing the technical weakness. According to data cited from CoinMarketCap, approximately 32.6 million ZRO tokens are unlocked on the 20th of each month. At current valuations referenced in the source material, this tranche represents $52.25 million in additional supply.

The most recent unlock occurred on 20 February. In an environment where demand is already fragile, the introduction of new tokens into circulation increases available liquidity. When buy side demand does not match that additional supply, prices can face downward pressure.

Recurring unlock schedules are part of many token distribution models, but their impact varies depending on prevailing market conditions. In ZRO’s case, the February unlock coincided with deteriorating sentiment and declining prices, amplifying short term weakness.

Holder Count and Market Capitalization Contract

On chain and market data point to a broader reduction in exposure among participants. The total number of holder addresses has been trending lower, with the contraction becoming more pronounced around 26 January, roughly one week after the January unlock.

The current holder count stands at approximately 1.01 million addresses. A declining number of holders typically indicates that some participants are exiting positions rather than new investors entering the market.

Market capitalization figures reflect this trend. ZRO’s market cap decreased from $592.16 million to $482.72 million over the observed period. This represents a drop of $109.44 million, or 8.78%, in less than a month.

Such a reduction signals that capital has left the asset rather than simply rotating within it. The combination of falling price, shrinking market capitalization, and declining holder numbers points to distribution rather than consolidation.

Community Sentiment Weakens Alongside Price

Community positioning data also shows a shift in outlook. On 20 February, bullish sentiment fell from 88% to 75%. The decline coincided with the latest token unlock and preceded the renewed price weakness.

A drop in bullish conviction suggests that fewer participants expect short term gains. In markets where sentiment plays a significant role in liquidity and speculative demand, reduced optimism can limit buying pressure.

For users monitoring crypto assets for trading or payment use cases, sentiment data provides additional context beyond price action. In this case, sentiment, holder metrics, and capitalization all moved in the same direction.

Spot Market Inflows Indicate Selective Accumulation

Despite the broader decline, spot market data presents a counterpoint. According to CoinGlass data referenced in the source, ZRO recorded $2.67 million in net spot inflows over a period of just over 48 hours. This means that more tokens were purchased than sold on spot exchanges during that timeframe.

When net inflows occur alongside falling prices, it indicates that a segment of market participants is absorbing available supply. These buyers are entering positions even as overall sentiment weakens and other holders reduce exposure.

The coexistence of declining market capitalization and positive spot inflows highlights a split in positioning. While some investors are exiting, others are increasing allocations at lower price levels.

Our Assessment

ZRO’s recent 12% daily decline follows a 10% two week pullback and comes shortly after its scheduled monthly unlock of 32.6 million tokens. Market capitalization has fallen by $109.44 million, and the number of holder addresses has decreased to around 1.01 million. At the same time, spot markets recorded $2.67 million in net inflows over 48 hours. The data shows concurrent supply expansion, reduced holder participation, weaker sentiment, and selective accumulation in spot trading.