Sonnet BioTherapeutics (SONN) Surges 37% on Crypto Treasury Pivot: A Biotech-to-Digital Asset Revolution Unfolds

Summary
• Sonnet BioTherapeutics (SONN) rockets 37.17% intraday to $4.39, its highest level since 2024
• Company announces $888M business combination with Rorschach I LLC, pivoting to Hyperliquid Strategies Inc.
• Strategic shift includes 12.6M HYPE token reserve ($583M value) and $305M cash infusion
• Institutional crypto investors like Paradigm and Atlas Merchant Capital back the transformation

Sonnet BioTherapeutics has ignited a 37% intraday rally as it restructures into a publicly traded crypto treasury company. The stock's meteoric rise follows the announcement of a transformative business combination with Rorschach I LLC, which will rebrand the firm as Hyperliquid Strategies Inc. This strategic pivot—anchored by a $583M HYPE token reserve and $305M cash investment—positions Sonnet at the intersection of biotech innovation and blockchain finance. With institutional crypto players like Paradigm and Atlas Merchant Capital on board, the move signals a bold reimagining of corporate capital structures in the digital asset era.

Strategic Pivot to Crypto Treasury Ignites Sonnet's Surge
Sonnet BioTherapeutics' 37% intraday surge stems from its definitive agreement to merge with Rorschach I LLC, a crypto-focused entity backed by Atlas Merchant Capital and Paradigm. The transaction transforms Sonnet into Hyperliquid Strategies Inc., a public company holding 12.6 million HYPE tokens (valued at $583M) and $305M in cash. This strategic shift aligns Sonnet with the Hyperliquid Layer-1 blockchain ecosystem, leveraging HYPE's growing market capitalization (13th largest crypto) and institutional demand. The deal's validation by high-profile investors—including Galaxy Digital and Pantera Capital—has created a speculative frenzy, with traders betting on the company's new role as a crypto treasury innovator. The merger also preserves Sonnet's biotech pipeline through a subsidiary structure, offering dual-value propositions to shareholders.

Blockchain Sector Rally Amplifies Sonnet's Momentum
The broader blockchain sector has surged in tandem with Sonnet's move, led by Coinbase Global (COIN) rising 3.76% on the day. This synchronized rally reflects growing institutional confidence in crypto treasury strategies, with Sonnet's business combination serving as a catalyst. While traditional biotech peers remain range-bound, Sonnet's pivot positions it as a hybrid play between biotech innovation and digital asset management. The sector's momentum is further fueled by HYPE's recent ascent to $13B market cap, validating the strategic value of tokenized treasury assets.

Technical Analysis and Strategic Positioning for the New Crypto-Biotech Hybrid
• 200-day average: 2.75 (well below current price)
• RSI: 44.3 (neutral, suggesting potential for further upside)
• Bollinger Bands: Price at 4.39 near upper band (5.65) with middle band at 4.38
• MACD: -0.138 (bearish) vs. signal line -0.065 (mixed)
• 30-day MA: 4.70 (price below) vs. 200-day MA: 2.75 (strong divergence)

Technical indicators suggest a short-term bullish setup for Sonnet. The stock is trading near the upper Bollinger Band (4.39 vs. 5.65 upper), with RSI in neutral territory (44.3) indicating no immediate overbought conditions. The 200-day MA at 2.75 is a critical support level; a break below 3.11 (lower Bollinger Band) would signal a reversal. For aggressive traders, a breakout above 4.39 could target the 5.65 resistance. Given the absence of listed options, leveraged ETFs like COIN (3.76% intraday gain) offer indirect exposure to the blockchain sector's momentum. A 5% upside scenario (4.3893 → 4.6088) would see a 5.4% gain, aligning with the stock's recent volatility profile.

Backtest Sonnet Stock Performance
Below is an interactive event-backtest module. It summarizes the seven occasions since 2022 when Sonnet BioTherapeutics (SONN.O) gained ≥ 37 % intraday and shows the subsequent 30-day performance versus a buy-and-hold benchmark.How to read:• Open the module to explore win-rates, average returns, and drawdown paths after each 37 %-plus spike. • Negative average returns through day 30 (≈ -32 %) and modest win-rates (≈ 15-43 %) signal that these sharp jumps were typically followed by mean-reversion rather than sustained momentum. • No horizons showed statistical significance, underscoring the high‐risk, low-reward nature of chasing large one-day pops in SONN.Let me know if you’d like deeper dives (e.g., different look-back windows, stop-loss/take-profit overlays, or comparison to peers).

Positioning for the Biotech-Crypto Convergence: Immediate Action Required
Sonnet's 37% surge reflects a paradigm shift in corporate capital structures, merging biotech innovation with crypto treasury strategies. The stock's technical setup—trading near Bollinger Band highs with RSI in neutral territory—suggests potential for further gains if the 4.39 level holds. Investors should monitor the 3.11 support level (lower Bollinger Band) and the 5.65 resistance (upper band). The broader blockchain sector, led by COIN (3.76% gain), provides a tailwind for Sonnet's new identity. Immediate action: Buy on dips to 3.11-3.50 range, with a target of 5.65 if the 4.39 breakout holds. This is a high-conviction trade at the intersection of two disruptive industries.