SOL Price Risks Fall Despite $2 Billion Wormhole Solana Debut
How Long Will the SOL Price Correction Continue? | Credit: Getty Images
Key Takeaways
- Wormhole debuted its native token W with an airdrop on April 3.
- The SOL price has corrected since its yearly high of $210 on March 8.
- Will the SOL price correction continue throughout the rest of April?
Wormhole is an interoperability protocol on Solana that allows the transfer of information and value across 17 different chains. It acts as a bridge between Solana and other DeFi networks. The Wormhole protocol itself came out in 2020 but the airdrop of its governance token W was yesterday on April 3.
Despite the launch, the SOL price has corrected since its yearly high on March 18. After another rejection on April 1, the price fell below $200 and is at risk of a deeper correction.
Details of the Wormhole Airdrop
Wormhole’s governance token W has a total supply of 10 billion. Early users received 617 million tokens, 6% of the total supply. Additionally, 12% is allocated to core contributors, and 23.3% will be held in the foundation’s treasury. The distribution is as follows:
- Guardian node: 5.1%
- Community & initial release: 17%
- Ecology & Incubation: 31%
- Core contributors: 12%
- Strategic network participants: 11.6%
- Foundation treasury: 23.3%
Wormhole has a rich history with Solana, beginning with the Solana Wormhole Hackathon in 2020. So far, over a billion messages and 200 apps have been sent and built using Wormhole.
While the W token will initially launch in Solana, it will soon expand to all the Wormhole-connected chains. W users will be able to lock and delegate tokens and will take part in the Wormhole DAO.
The airdrop heavily favors early and active users, with bonuses offered to those who transacted during the bear market and those who consistently used Wormhole for three or more months.
Community group allocations vary, with different rewards for holders of NFTs such as DeGods and y00ts and Mad Lads NFT holders, with the latter receiving the highest allocation, though a portion of which is vested over a year.
The W token currently has a price of $1.17 and a market capitalization of $2.1 billion, leading to a ranking of #207.
SOL Price Prediction: Correction Ahead?
The weekly time frame technical analysis suggests the SOL price is likely to correct in April, because of the wave count and RSI readings.
The wave count indicates that SOL has completed wave three in a five-wave upward movement (white). Wave three has extended, as shown by its sub-waves (black).
The top of wave three at $210 coincided with a Fib and horizontal resistance area. Additionally, the weekly RSI generated a significant amount of bearish divergence (green).
So, it is possible that wave three has ended and SOL has begun the corrective wave four. In this case, the price can fall 25% to the 0.382 Fibonacci retracement support level at $135.
This bearish SOL price prediction will be rendered invalid with a weekly close above $210. Then, SOL can increase toward the all-time high of $260.
Correction Before New Highs
Despite the airdrop of the W token that was met with much fanfare, the SOL price has not benefited from its launch. Rather, the price is likely mired in a significant correction that could continue for the rest of the month. Only afterward will the SOL price regain its footing and likely move toward its all-time high.
