The cryptocurrency market faced another wave of volatility as Walrus (WAL) tumbled sharply following its Binance Alpha airdrop campaign. Within just 24 hours, the token’s value slipped over 4%, underperforming the broader crypto market, which declined by 1.11% during the same period.

At the start of the trading session, WAL was priced at $0.4042, but heavy selling pressure soon pushed it down to $0.379, marking a 7.52% weekly loss. Analysts suggest the decline reflects typical post-airdrop selling behavior and weak short-term sentiment in the altcoin space.

Binance Alpha Airdrop Triggers Heavy Sell Pressure

The sell-off began shortly after Binance Wallet listed Walrus (WAL) on its Binance Alpha platform, introducing an incentive-driven airdrop. Eligible users could redeem 150 WAL tokens by using their Alpha Points via the Binance Alpha Events page.

The campaign featured a two-phase structure aimed at rewarding early participation:

• Phase 1 (First 18 hours): Users needed at least 210 Alpha Points to qualify.

• Phase 2 (Next 6 hours): The threshold dropped by 15 points per hour, starting at 195, until the airdrop allocation was completed.

While the event boosted engagement and liquidity, it also led to rapid token claims followed by immediate profit-taking, a common outcome after airdrops. This influx of sell orders created downward pressure on WAL’s price.

According to CoinMarketCap, daily trading volume surpassed $25 million, signaling strong activity but also highlighting widespread liquidation by early recipients.

Technical Resistance and Market Sentiment Weigh on Price

Following the airdrop, WAL faced technical rejection at its 7-day Simple Moving Average (SMA) of $0.404 and the Fibonacci 23.6% retracement at $0.433. Failure to break these resistance levels intensified the decline.

Meanwhile, the Altcoin Season Index fell from 51 to 44 — a 13.8% drop — suggesting a broader rotation out of riskier altcoins. Analysts note that algorithmic trading may have compounded the volatility, exploiting high-volume conditions to trigger further downward momentum.

Despite the price slump, Walrus maintains strong fundamentals that could help stabilize its value once speculative trading fades.

Walrus: A Decentralized Storage Solution on Sui

Walrus (WAL) is a decentralized data storage protocol built on the Sui blockchain, designed for secure and efficient file management. The project leverages erasure coding technology to minimize storage overhead, achieving up to 5× efficiency compared to the 100× multiplier seen in traditional blockchain storage systems.

The project’s total and max supply stands at 5 billion WAL tokens, with 1.47 billion in circulation. Its market capitalization is roughly $565.8 million, supported by a 24-hour trading volume exceeding $25 million.

These fundamentals suggest that while short-term traders may be exiting, the project’s long-term potential remains intact, particularly given its focus on cost-effective and scalable data solutions.

Analysts Call It a Typical Post-Airdrop Correction

Market experts describe the WAL decline as a classic post-airdrop correction. Similar patterns have been seen with tokens like Arbitrum (ARB) and Optimism (OP) — both of which fell initially before recovering as the market matured.

“Investors often treat airdrops as short-term opportunities,” said Jacob Liu, blockchain strategist at Coinverse Research. “After claiming tokens, most users sell quickly to lock in profits. But this doesn’t necessarily reflect the project’s true value or future prospects.”

If Walrus maintains support near $0.36, analysts expect a technical rebound once selling pressure eases and traders re-enter at discounted levels.

Broader Market Headwinds Add Pressure

The WAL decline also coincides with a broader cooldown in the altcoin market. Bitcoin’s consolidation near $121,000 has slowed speculative flows into smaller tokens. Meanwhile, Ethereum and BNB have held modest gains, diverting liquidity from newer projects like Walrus.

Macroeconomic factors have also played a role. Recent U.S. data highlighting persistent inflation and potential interest rate adjustments have made investors more cautious toward high-volatility assets, including altcoins.

Still, many analysts remain optimistic about a medium-term recovery, citing institutional adoption and the expansion of Layer-2 scaling solutions, which are improving blockchain efficiency and reducing transaction costs.

Expert Outlook: Short-Term Pain, Long-Term Potential

Industry experts believe Walrus’s fundamentals and integration within Sui’s modular architecture position it for long-term growth. The project’s efficient design allows faster, cheaper data validation, giving it an advantage over traditional storage networks.

“The current price dip reflects trader behavior, not project weakness,” said Sarah Martinez, senior analyst at CryptoScope. “Walrus remains one of the most efficient decentralized storage frameworks in the market. Once the profit-taking ends, it could regain momentum.”

In the near term, investors are watching resistance levels at $0.40 and $0.43. A successful retest could indicate recovery, while continued weakness might extend the correction further.

Conclusion: A Temporary Setback for a Strong Project

Walrus’s post-airdrop sell-off underscores the volatile nature of crypto markets, especially around new listings and reward events. Although the token faces short-term pressure, its solid technology, active ecosystem, and real-world utility suggest potential for recovery once speculative trading stabilizes.

As sentiment improves across the altcoin sector, Walrus may emerge stronger, leveraging its unique storage model and blockchain efficiency to attract long-term investors and developers.