LayerZero (ZRO) Struggles Below $2 After $58M Token Unlock Despite Stargate Acquisition
Jessie A Ellis Aug 28, 2025 21:34
ZRO price holds at $1.98 (+1.12%) as traders weigh bullish Stargate merger against bearish pressure from 25.71M token unlock worth $58.36 million.
Quick Take
• ZRO currently trading at $1.98 (+1.12% in 24h) • LayerZero's RSI at 48.65 signals neutral momentum with potential downside • $120M Stargate acquisition completed but overshadowed by recent token unlock selling pressure
What's Driving LayerZero Price Today?
LayerZero faces mixed signals as the ZRO price navigates between bullish acquisition news and bearish token unlock pressure. The most recent catalyst came from the August 20th release of 25.71 million ZRO tokens worth approximately $58.36 million, creating immediate selling pressure that has kept the token below the $2 psychological level.
However, this bearish pressure is being somewhat offset by the positive momentum from LayerZero's completed $120 million acquisition of Stargate Finance on August 24th. The deal, settled entirely in ZRO tokens with over 94% DAO approval, represents a significant consolidation in the cross-chain infrastructure space. STG tokens are being converted to ZRO at a fixed rate, potentially creating additional demand for ZRO price in the medium term.
The acquisition optimism initially drove ZRO price to $2.18 on August 18th, representing a 3.96% gain when the deal was first announced at $110 million. The final $120 million valuation suggests strong conviction from both teams about LayerZero's future prospects.
ZRO Technical Analysis: Neutral Signals Point to Consolidation
LayerZero technical analysis reveals a market in consolidation mode, with ZRO's RSI at 48.65 indicating neither overbought nor oversold conditions. This neutral RSI reading suggests traders are waiting for a clear directional catalyst before committing to significant positions.
The MACD tells a more concerning story for bulls, with the histogram at -0.0159 indicating bearish momentum building beneath the surface. LayerZero's MACD line sits at -0.0076 below the signal line at 0.0083, suggesting downward pressure may intensify if buying support fails to materialize.
Moving averages paint a mixed picture for ZRO technical analysis. The token trades below its 20-day SMA at $2.08 and significantly under the 200-day SMA at $2.36, indicating longer-term bearish sentiment. However, ZRO price remains close to both the 7-day SMA ($2.01) and 50-day SMA ($2.03), suggesting near-term consolidation rather than sharp decline.
LayerZero's Bollinger Bands show the token positioned at 0.3257 of the band width, closer to the lower band at $1.81 than the upper resistance at $2.34. This positioning typically indicates oversold conditions that could attract value buyers.
LayerZero Price Levels: Key Support and Resistance
Critical LayerZero support levels emerge at $1.85 for immediate support, where buyers previously stepped in during recent weakness. The stronger LayerZero support sits at $1.64, representing a significant technical floor that has held during previous sell-offs.
For ZRO resistance, traders should watch the $2.60 level, which represents both immediate and strong resistance according to current technical analysis. A break above this level would likely trigger momentum buying and potentially test higher ranges.
The current trading range between $1.91 and $2.02 over the past 24 hours shows ZRO price consolidating near the pivot point at $1.97. This tight range suggests a breakout may be imminent in either direction.
Based on Binance spot market data, the average true range (ATR) of $0.16 indicates moderate volatility, giving traders clear risk parameters for position sizing.
Should You Buy ZRO Now? Risk-Reward Analysis
Short-term traders should approach ZRO price with caution given the neutral RSI and bearish MACD signals. The risk-reward profile favors waiting for either a break above $2.60 resistance for bullish confirmation or a test of $1.85 support for potential value entry.
Swing traders might consider the completed Stargate acquisition as a fundamental catalyst worth accumulating on weakness. The $120 million deal size and token conversion mechanism could create sustained demand for ZRO/USDT pairs over the coming months.
Long-term investors should weigh the token unlock pressure against the strategic value of the Stargate merger. With ZRO trading 67% below its 52-week high of $6.06, current levels may represent attractive entry points for those believing in LayerZero's cross-chain infrastructure thesis.
Risk management remains crucial, with stop-losses recommended below $1.64 for long positions and above $2.60 for any short-term bearish plays.
Conclusion
ZRO price faces a critical juncture as the market digests both the positive Stargate acquisition and negative token unlock pressure. With LayerZero technical analysis showing neutral momentum and key support holding at $1.85, the next 24-48 hours will likely determine whether bulls can reclaim the $2 level or if further consolidation toward $1.64 support awaits. Traders should monitor ZRO/USDT volume closely for breakout signals in either direction.
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