Sonic Plummets 20.37% Amid Market Selling Pressure

In the past 24 hours, liquidity outflows have surged across the market, indicating increasing selling pressure. Market sentiment, particularly among derivative traders, remains weak. Sonic, an altcoin, experienced a significant decline of over 20.37%, confirming the presence of sellers in the market. The selling pressure is likely to persist as trader sentiment remains sharply negative, suggesting a potential for further market correction.

The recent decline in Sonic can be attributed to substantial liquidity outflows at both the chain and protocol levels. Following a week of significant chain inflows, with netflows reaching a high of $116.1 million, the sentiment began to shift. Within 24 hours, market participants started withdrawing liquidity, resulting in netflows turning negative at $4.3 million. This negative reading implies that market participants are selling into the market.

Sonic’s total value locked (TVL) has also continued to decrease. TVL provides a valuation for applications relying on a blockchain. At the time of writing, Sonic’s TVL had dropped from a high of $1.078 billion to $995.95 million, losing approximately $82 million as market participants continued to sell. This downward pressure has significantly contributed to Sonic’s decline. Additionally, derivative market traders are also selling the asset.

In the derivatives market, where traders speculate on price movements or hedge risk without owning the actual asset, short positions have been dominant. The funding rate, a key metric measuring which cohort of the market is paying a premium fee to maintain market disparity between the spot and futures price of an asset, turned negative with a reading of -0.0114% for Sonic. This indicates that short traders are dominating most positions opened on Sonic and are betting on a further market decline.

This selling pressure is supported by high trading volume in the market. The trading volume surged significantly, confirming high selling pressure across the market. If the selling pressure continues to grow alongside the price, the downtrend could further intensify, with Sonic holders and long traders recording further losses. Therefore, an analysis was conducted to determine where the price currently stands and its potential movement.

Sonic’s movement on the charts depends on the price not falling below a key demand level between 0.38 and 0.42. This demand zone has been a point for proving uptrends on the past two occasions of encounter. Failure to hold this level would mean that Sonic will take a hit. The next target for price trading below this level will be $0.318. Depending on the level of selling momentum in the market, trading into this level would imply whether the asset continues to decline or sees a rebound.