YEREVAN (CoinChapter.com) — Two Solana-based decentralized application projects have announced their token airdrops in November. Let’s discuss the details of these free crypto distributions and their potential impact on the price of Solana’s native token, SOL.
Solana’s Jupiter Exchange and Pyth Network Announces Airdrop
The Jupiter Exchange will launch its native token, JUP, per its announcement at Solana’s Breakpoint conference.
The team said it would distribute 40% of JUP tokens to about 955,000 eligible users of the Jupiter Exchange community. Meanwhile, it will sell 20% of JUP tokens in the open market. The remaining 40% of JUP will be in strategic reserves.
JUP will function as a governance token inside the Jupiter Exchange, akin to Uniswap’s UNI token.
Pyth Network, another Solana project, announced the “Pyth Network Retrospective Airdrop” on Nov. 1, 2023. This airdrop will distribute PYTH tokens to over 75,000 wallets that have been active on 27 blockchains and more than 200 dapps.
The team will select the wallets based on their on-chain activity with dapps interacting with Pyth data. In addition, it will give free PYTH tokens to the users promoting Pyth Network on social media.
For instance, the Pyth Network team will determine community members’ allocations through specific social criteria, such as those who are their official Discord server administrators, own Pyth NFTs or are outstanding members of their “Ambassador Programs.”
Will Airdrop FOMO Boost SOL Price?
Airdrops often positively impact the price of the underlying blockchain’s native token. That happens by increasing activity and booming interest within the ecosystem, thus boosting demand for underlying tokens such as SOL.
So, Jupiter Exchange’s and Pyth Network’s airdrop announcements can encourage new users to join the Solana network. Even network growth does not impact the SOL price, the days leading up to the airdrops can prompt a speculative bull run.
For instance, SOL’s price has rallied nearly 30% since the Pyh Network’s airdrop announcement. Of course, additional factors, such as the ongoing Spot Bitcoin ETF euphoria, have contributed to the price rally in Solana and other altcoins.
From a technical standpoint, SOL’s price rally is part of an ascending triangle reversal setup, as shown above. As a result, the Solana token’s probability of rising toward $100 by March 2024 seems high. Of course, Jupiter Exchange and Pyth Network airdrops are some of the catalysts behind the technical rally.
Beware of a 25% SOL Price Drop, Though
But, as a note of caution, SOL’s road to $100 goes through a minor correction, given its weekly relative strength index (RSI) is now above 70, an overbought zone. An overbought RSI reading signals an imminent correction.
Suppose SOL’s price drops. Then, its next downside target is the ascending trendline’s upper trendline near $28.50. Confirming a bull pattern by retesting its breakout level as support is common in technical analysis. Hence, SOL’s overall bias will remain skewed toward bulls even after a 25% correction.