Sonic’s native token S has come under intense selling pressure, dropping 15% on June 13 to an intraday low of \$0.314, marking a staggering 68% decline from its 2024 high. With its market cap teetering just above \$1 billion, the once-hyped project is now facing a growing list of bearish catalysts that threaten to push prices even lower.
Geopolitical Shocks and Market-Wide Weakness
Sonic’s sharp correction coincided with a broader selloff across crypto markets after Iran launched a military attack on Israel, escalating global geopolitical tensions. The market-wide risk-off move led to an overall 7% drop in total crypto market value, and Sonic was among the worst-hit assets.
Although Coinbase announced the listing of the S token earlier today a development that typically boosts sentiment it did little to stop the downward momentum. Investor confidence continues to erode, driven by weak on-chain performance and declining participation across the Sonic ecosystem.
DeFi Activity and Liquidity Drop Sharply
According to Santiment, the total value locked (TVL) across DeFi protocols on the Sonic chain has plummeted from \$2 billion in May to \$1.54 billion. Major DeFi players like Silo Finance, AAVE, Pendle, and Beets have seen TVLs drop by 35% to 50% in just the last month.
Sonic’s on-chain revenue has also collapsed, falling to \$5,977 daily, down from over \$42,000 in May. Meanwhile, stablecoin supply has shrunk by \$200 million in 2024, further weakening network liquidity and dampening user activity.
Adding to the gloom, funding rates remain negative, indicating persistent bearish expectations from futures traders. On May 13, the funding rate slipped to 0.05%, its lowest point in over a week, highlighting short bias dominance.
Technical Breakdown Paints a Bleak Picture
On the 1-day USDT chart, Sonic recently broke below the crucial \$0.32 support a key level that previously acted as a floor during April’s pullback. This breakdown comes after a failed hold above the \$0.38 neckline of a double-top pattern formed around \$0.618, a textbook bearish signal.
Sonic is currently trading within a falling broadening wedge, and unless it breaks out, the formation suggests ongoing downward pressure. Technical indicators confirm the trend:
- The 20-day SMA has crossed below the 50-day SMA, forming a death cross, with the gap continuing to widen.
- The MACD lines are pointing downward, reinforcing the bearish bias.
- The Aroon Up sits at 0%, while Aroon Down remains elevated, a sign that bears are firmly in control.
What to Watch Next
If the selling continues, \$0.30 stands as the next major psychological support zone for Sonic. A breakdown below that level could open the door to even deeper losses, particularly if network usage and liquidity continue to contract.
However, if buyers manage to reclaim the upper boundary of the wedge and push the price above \$0.399, which aligns with the 20-day SMA, a short-term bullish reversal could be in play.
Sonic’s steep decline reflects both macro-driven risk aversion and growing concerns about its internal ecosystem health. Unless the project can reignite on-chain activity and regain investor confidence, Sonic’s price may continue to slide, testing lower support levels in the weeks ahead. While Coinbase’s listing offers some visibility, it’s unlikely to reverse the trend without stronger fundamentals to back it up.
