According to IntoTheBlock, airdropped tokens often experience initial popularity and performance boosts. However, over time, they tend to lose value due to diminishing market interest and increasing token supply. The report highlights that during the first few weeks post-airdrop, tokens may see significant price increases, driven by initial hype. For instance, a token airdropped in December 2024 saw a 50% price increase within the first week. However, as the novelty fades, trading volumes tend to decline. Airdropped tokens such as TokenX, which was distributed in November 2024, experienced a 40% drop in trading volume over the first month. This decline is often attributed to a reduction in speculative trading, as the initial excitement wanes.

The implications of these findings are significant for traders. Airdropped tokens often come with a large supply, which can lead to supply inflation. As more tokens are distributed or unlocked over time, the increased supply can exert downward pressure on prices. For example, TokenY, airdropped in October 2024, saw its price depreciate by 35% over two months as additional tokens were released into circulation. This trend underscores the importance of monitoring token release schedules and understanding the long-term supply dynamics of airdropped tokens. Traders should be aware that while these tokens may offer short-term gains, the long-term outlook may not be as promising without sustained demand.

Technical indicators and trading volume data further support these observations. IntoTheBlock's analysis of airdropped tokens reveals that Relative Strength Index (RSI) levels often indicate overbought conditions shortly after the airdrop, followed by a decline as the market corrects itself. For instance, the RSI for TokenZ peaked at 75 in the first week post-airdrop in September 2024 but fell to 45 within a month. Additionally, on-chain metrics show a decrease in active wallet addresses and transaction counts over time. This decline in on-chain activity is indicative of reduced engagement and interest from traders. Moreover, liquidity metrics indicate that market depth often decreases, making it challenging to execute large trades without affecting the price. These technical and volume indicators provide critical insights for traders considering holding airdropped tokens long-term.