Sonnet Surges 85% in Historic Crypto Shift—What’s Next?

• Sonnet (SONN) soars to $9.55, up 84.7% intraday from $5.17 previous close
• Announces $888M business combination with Rorschach to pivot to HYPE token treasury
• Sector peer B. Riley trims $18M debt in fifth bond exchange deal

A seismic shift in corporate strategy has propelled Sonnet BioTherapeutics into a crypto-centric paradigm, driving its shares to an 85% surge—the largest single-day jump in its history. The stock’s meteoric rise, fueled by a transformative deal with institutional crypto backers, contrasts sharply with muted sector activity as peers focus on balance sheet repairs.

Crypto Treasury Play Ignites 85% Surge
Sonnet’s explosive rally stems from its definitive agreement to merge with Rorschach I LLC, a vehicle backed by Atlas Merchant Capital and Paradigm, to form Hyperliquid Strategies Inc. (HSI). The $888M transaction creates a publicly listed crypto treasury holding 12.6 million HYPE tokens (worth $583M) plus $305M in cash. Prominent investors like Galaxy Digital and Pantera Capital validate the play, while the appointment of ex-Boston Fed chief Eric Rosengren to the board adds institutional credibility. The deal’s immediate catalyst is the strategic pivot from biotech to crypto asset management, aligning with HYPE’s rise to 13th-largest cryptocurrency by market cap.

Technical Setup Points to Sustained Bull Run
Technical Indicators:
• MACD: 0.9996 (above 0.6024 signal line), bullish momentum accelerating
• RSI: 86.25 (overbought territory, but no reversal signal yet)
• Bollinger Bands: $9.55 trades above upper band ($5.81), signaling extreme volatility expansion
• 200-day MA: $2.19 (far below current price)

The technicals paint a picture of a breakout phase. Bulls are targeting the $19.00 52-week high—a level not breached since late 2024—while immediate resistance rests at $15.00 (today’s open). Traders should note the $7.78 intraday low as a short-term support pivot. Overbought RSI suggests a potential pullback to the upper Bollinger Band ($5.81) before resuming ascent. However, institutional conviction and the HYPE token’s meteoric growth trajectory argue for sustained momentum.

Options Play: No actionable options contracts provided in the data. Focus remains on technical levels and macro crypto trends. Aggressive bulls could target a retest of $19.00 with a stop below $15.00.

Backtest Sonnet Stock Performance
The backtest of SONN's performance after an intraday surge of 85% shows mixed results. While the 3-day win rate is high at 41.49%, the 10-day and 30-day win rates are lower at 39.33% each. The maximum return during the backtest period was 1.14%, which occurred on day 25, indicating that while there is potential for gains, the strategy also carries some risk.

Hyperliquid Play or Hype? Key Levels to Watch
Sonnet’s transformation hinges on HYPE’s adoption trajectory and regulatory clarity for public crypto treasuries. The $19.00 resistance (52-week high) and $7.78 support (intraday low) are critical pivots for momentum traders. While sector peers like Coinbase (COIN) +1.83% trade in choppy crypto markets, Sonnet’s institutional backing and strategic pivot could sustain its ascent. Monitor the $15.00 psychological level and the S&P’s Diversified Financials sector performance for cross-currents. For now, this is a high-risk, high-reward call—only for traders willing to bet on crypto’s institutional mainstreaming.

Action: Fade the rally below $15.00 or chase above $19.00 with discipline.