LayerZero [ZRO] briefly rallied 5.18% over an 11-hour stretch on Friday, 24 April, before giving back gains, extending a volatile spell that followed a three-day slide of about 20% the prior week. The rebound came in the shadow of the LayerZero-based KelpDAO bridge exploit, which accounted for losses of roughly $292 million, or 116,500 rsETH, and has weighed on sentiment as market participants reassess risk and near-term price direction.

Key Factors

Analysts note that the KelpDAO incident has been a central driver of the latest downside pressure. KelpDAO attributed the exploit to LayerZero’s RPC nodes and the 1-of-1 Decentralized Verifier Network, an allegation that has sharpened scrutiny of the interoperability protocol’s infrastructure. Against this backdrop, ZRO’s attempt to rebound on 24 April was short-lived, with sellers reasserting control soon after the move.

From a price-structure standpoint, technicians point to a bearish shift on the daily chart that first appeared on 30 March. That break lower was followed by a bounce slightly beyond $2.10, but the recovery was sold into, sending ZRO to fresh local lows. Even so, analysts emphasize that this weakness is unfolding within a broader 2026 trading range. Throughout the year, ZRO has oscillated between $1.47 at the lower boundary and $2.28 at the upper boundary, with a mid-range area near $1.88 guiding mean-reversion impulses. The range lows have already been grazed, and a further retest remains on the table.

Analyst Views

Market technicians describe the indicator backdrop as decisively bearish in the near term. The Chaikin Money Flow (CMF) has struggled to advance beyond +0.05 over the past two months, even when price pressed toward the range highs, suggesting muted and inconsistent capital inflows alongside evidence of distribution. The Directional Movement Index (DMI) has also leaned negative, with both the Average Directional Index (ADX) and the -DI line holding above the commonly watched 20-threshold, underscoring a firm downside trend. Complementing that, the MACD has slid further below the zero line, reflecting sustained bearish momentum into the latest two-week window.

Despite these readings, analysts argue that the established range keeps dip-reaction scenarios in play. Until a decisive breakdown of the range occurs, market participants often look for reflexive bounces near the lower boundary as liquidity pools build and short-term positioning becomes stretched. That framework is informed by February’s price action, when ZRO swept the $1.35 region before advancing toward the range high around $2.30. Based on that precedent, some technicians flag the possibility of another sweep into the $1.35–$1.50 area that could elicit a short-term bullish response.

At the same time, outlooks remain guarded given recent events. With sentiment softened by the exploit and trend signals aligned to the downside, analysts also consider a clean breakdown below $1.35 a credible near-term risk. In this setting, several caution that pressing new shorts right at the range lows can be risky, as whipsaws are common when price interacts with well-defined support zones. Instead, they frame the path ahead as a binary set of scenarios: either a liquidity sweep near or below the recent floor that rebounds within the range, or a continuation that confirms a bearish break of the multi-month structure.

Market Outlook

In the days ahead, technicians say the range continues to anchor expectations. A sustained hold above the $1.47 area would keep the $1.88 mid-range as an intermediate waypoint and the $2.28 region as the broader cap of the channel. Conversely, persistently weak flows and momentum—telegraphed by a CMF that fails to rise, a DMI configuration that stays bearish, and a MACD that remains below zero—would support the case for further probing of prior lows. Within that framework, analysts will monitor whether any dip into the $1.35–$1.50 band produces the kind of fast, short-term reaction that characterized February’s sweep.

Overall, the near-term bias remains cautious. The exploit has undermined confidence, price structure has turned lower, and technical gauges favor sellers. Yet the presence of a clearly defined 2026 range tempers outright bearishness, leaving room for reactive rallies from depressed levels unless and until that range decisively gives way.

Bottom Line

  • Analysts say KelpDAO’s exploit has dampened sentiment around LayerZero [ZRO] and added bearish pressure.
  • Technicians highlight the potential for a sweep of the $1.35–$1.50 zone that could trigger a short-term bounce, while also acknowledging the risk of a breakdown below $1.35 if bearish momentum persists.

These views reflect market analysis and are not financial advice.