Sonic’s $74.59M Token Unlock: A Recipe for Disaster? 🚨

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  • A whopping $74.59 million worth of S tokens has been unleashed upon the world, increasing the circulating supply by a not-too-shabby 7.39% 🤑.
  • Market participants, being the clever chaps they are, have already begun selling the asset, adding a dash of downward pressure to its performance 📉.

It appears that Sonic [S] has hit a bit of a snag, old bean. A major token unlock has gone live, injecting a cool $74.59 million worth of tokens into circulation. According to the chaps at DeFiLlama, this accounts for 5.17% of the total supply and 7.39% of the circulating supply 🤯.

Now, one might think that this sudden increase in float would be a jolly good thing, but alas, it’s raised concerns about a potential supply glut 🤦‍♂️. Unless matched by proportional demand, the imbalance could trigger further downside across spot and derivatives markets 📊.

This increase in float suggests that if supply outweighs demand, it could lead to a market-wide selloff 🚨. AMBCrypto analysis found that the likelihood of an equal surge in demand remains slim 🤔.

DeFi Investors Make a Quick Exit 🏃‍♂️

At the time of writing, a selloff was already underway 📉. Notably, decentralized finance (DeFi) investors have been reducing their exposure to S tokens 💸.

Between the 3rd and 5th of July, DeFi wallet holders offloaded a whopping $37.9 million worth of S tokens 💸. Their cumulative holdings dropped from $836.44 million to $798.49 million 📊.

This outflow indicates that investors are unlocking S across multiple platforms and withdrawing their assets, implying a shift from long-term holding to a more bearish, sell-oriented sentiment 📉.

Sellers Dominate the Market 🚀

On-chain metrics showed the trend wasn’t isolated 🤝. Retail investors followed suit 👥.

According to CoinGlass’ Exchange Netflow data, there was a significant outflow of assets over the past week, totaling $427,000 moved from private wallets to exchanges 📈.

The most notable selloff occurred within the past 24 hours, during which spot investors sold approximately $110,000 worth of S crypto, accounting for more than 25% of the week’s total outflows 📊.

Liquidation data from Coinalyze further confirmed bearish sentiment in the perpetual markets 📉.

In the perpetuals market, long traders saw $182,800 in liquidations, while shorts lost just $8.4 🤑.

The takeaway? For every $1 wiped from bearish traders, bullish longs were hit for over $21,000 🤯. Such a lopsided ratio implied a market tilted heavily in favor of sellers 📊.

A Blast from the Past: January’s Unlock 📆

AMBCrypto analyzed S’s performance during its last major token unlock to determine whether a similar pattern could emerge 🔮.

During the unlock event on the 4th of January—when $998.72 million worth of Sonic token entered circulation—the token experienced a notable drop 📉.

From a local high on the 4th of January, S token declined 13.5% by the 7th 📊. By the 20th of January, it had recorded a cumulative decline of 42.75% after forming a local low 📉.

At press time, S created a local high on the 25th of June 📆. While this does not confirm an impending price drop, a break below the support level at $0.3022 could signal the formation of a local lower low 📊.

Given the prevailing bearish trend and additional supply pressure expected from the token unlock, S is likely to break down and form a new lower low 📉.

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2025-07-06 02:26