SOL corrected alongside the wider crypto market sell-off, but data points to more concerning reasons for the price drop.
Solana's native token, SOL (SOL), experienced a 9% decline on Jan. 18, reaching a $91.40 low. The continuous rejection from the $100 level has persisted over the past 15 days. However, this should not be of extreme concern, considering that the total cryptocurrency market capitalization has been unable to sustain levels above $1.6 trillion throughout 2024. Despite the recent setback, SOL recorded an impressive 84% gain in December, causing investors to express concerns about the lack of positive price momentum.
The FOMO (fear of missing out) driving SOL's rally in December 2023 was triggered by the pump of Solana SPL token airdrops, which included Jito (JTO), BONK, and Dogwifhat (WIF). This movement stimulated demand for the Solana Saga Phone, as some projects targeted exclusive offers for these users. However, the tide appears to have turned, as BONK faced a 15% correction between Jan. 17 and Jan. 18, while JTO declined by 19% in the same period.
Another factor contributing to SOL's recent correction was the excessive optimism caused by airdrop expectations. Some launches took longer than anticipated, while others provided only a temporary short-term boost to its decentralized applications (DApps), fading after the respective airdrop snapshots. Analysts and influencers created lists of the most promising opportunities, but almost none of the tokens reached decent valuations and volumes.
