Wormhole Airdrop Catalyses Decline A Day After Token Launch

Summary:
• Wormhole distributed more than $800 million worth of $W token , and holders have been selling their tokens fast, leading to a steep decline.

Wormhole token climbed down from its opening price on Thursday, losing 13.25% to trade at $1.136. The $W token was listed on Wednesday, April 3rd, 2024, to great excitement in the crypto community. Furthermore, the listing came with an airdrop that saw the multi-chain protocol distribute 6.7% of its total supply to its supporters. The token opened trading at $1.66 on OpenBook and went on to touch a daily high of 1.820 before settling lower.

The current decline from the opening day highs is not uncommon for newly-listed assets. In wormhole’s case, the airdrop saw thousands of token holders cash in on the listing to make a profit. Wormhole’s total supply stands at 1.5 billion tokens, meaning that its market capitalization currently stands at $2.04 billion. The project raised $225 million in its last funding round at a valuation of $2.5 billion. Therefore, the current token price means that the project has declined from its pre-listing valuation.

Wormhole is a multi-chain protocol that facilitates data and crypto asset transmission between different blockchains. Initially built for Solana, it will soon be available on Ethereum L2 chains. It boasts of low transaction costs, fast processing times, high scalability and security. Its governance system is also unique, as it allows any token holder on any supported chain to initiate proposals for the DAO members to vote on.

There were a number of sideshows around the lauch of $W token, with a meme coin dubbed “warmhole” launched around the same time. In addition, scammers and hackers attempted to fleece unsuspecting investors around the airdrop event.

Technical analysis

The RSI indicator signals that the sellers are currently in control. The downward momentum is likely to continue if resistance remains at the 1.311 pivot mark. That could propel movement to break the support at 1.211, potentially going as far as testing the psychological 1.00 mark. However, a return above 1.311 will signal a potential reversal, with the buyers in charge. That could build the momentum to break the next resistance at 1.440, enabling a potential movement to test 1.578.