Sonic (S) has been under intense selling pressure for weeks, as large investors—referred to as whales—continue to offload substantial quantities of the token. With a 27.11% drop in price over the past week, market sentiment has become increasingly bearish. However, a shift may be underway. Spot traders, who typically hold their assets for longer periods, have started pulling their assets off exchanges, creating the possibility of a supply squeeze that could potentially counter the ongoing sell-offs from the whales. As the battle between these two forces intensifies, the fate of Sonic’s price hangs in the balance.
The current market slump can largely be attributed to the actions of whales. These large holders of Sonic tokens, often representing a sizable portion of the total circulating supply, have been selling heavily over the last few weeks. According to recent data from IntoTheBlock, whales sold 8.66 million S tokens worth around $5.41 million within just 24 hours, continuing the trend that has driven Sonic’s price downward. The asset has shed significant value as a result of the massive sell-offs.
Notably, this level of selling pressure isn’t new. Just days earlier, whales offloaded an even larger amount—65.17 million tokens—which helped propel the recent bearish momentum. Despite this, there are signs that whales may be nearing the exhaustion point. The sheer volume may soon dwindle, as whales have already liquidated large portions of their holdings.
Market sentiment, however, remains tilted toward the bears, as there are 6.94% more bearish whales than bullish ones in the market. Still, the fact that the pace of selling has slowed indicates a potential turning point. If whales do indeed run out of tokens to sell, the bearish pressure could subside, paving the way for other market participants to regain control.
While whales continue to exert downward pressure on Sonic’s price, a notable shift is occurring as spot traders begin to take action. Spot traders are individuals who purchase tokens with the intention of holding them for longer periods, as opposed to traders engaging in frequent buying and selling.
Recent data reveals that 1.05 million S tokens were removed from exchanges in just 24 hours. When tokens are moved off exchanges, it typically signals that traders are less inclined to sell, reflecting a more long-term view of the asset. This behavior can create a supply squeeze, which could result in reduced selling pressure and increased buying interest as fewer tokens remain available on the market.
This move is particularly important because the continuous outflow of tokens from exchanges reduces the supply of Sonic in circulation. If this trend continues and spot traders hold their assets off the market, it could create upward price pressure, especially if demand for the token remains steady or increases.
Another key factor to consider is the ongoing surge in trading volume. Since the beginning of January, Sonic’s trading volume has experienced a substantial increase, from around $890,000 to over $15.47 million as of the 23rd of January. While rising volume doesn’t automatically indicate a bullish trend, it can be a sign of growing interest in the token, particularly when accompanied by a shift in market sentiment.
If the current trend of increasing volume continues, coupled with the shifting dynamics between whales and spot traders, Sonic could see a quick price reversal. Increased volume often corresponds to stronger market momentum, which, in turn, can accelerate price moves—both upward or downward. Given the current market dynamics, a rise in volume could quickly translate into a rally if market sentiment turns positive.
The outcome of Sonic’s price trajectory largely depends on whether spot traders can sustain their actions and if the whale sell-off truly reaches its limit. Should whales run out of tokens to sell, and if spot traders continue to reduce the supply of Sonic on exchanges, the asset could very well experience a rebound.
However, there’s no guarantee that the rebound will happen immediately. The price of Sonic remains highly sensitive to external factors, including overall market conditions and the emotional sentiment of traders. A continued decrease in whale activity, coupled with an uptick in demand from spot traders, could set the stage for a recovery, while ongoing sell pressure could lead to further declines.
For now, Sonic remains in a tug-of-war between whales and spot traders. The momentum is shifting slightly in favor of spot traders, who are pulling tokens off exchanges in anticipation of higher prices. If this trend continues and whales begin to exhaust their sell positions, Sonic may have the opportunity to regain lost ground.
Ultimately, the outcome hinges on whether spot traders can continue to tighten the supply and whether whales reach their exhaustion point. As more volume pours into the market and sentiment slowly shifts, Sonic’s price could experience a much-needed rebound. Investors will need to stay vigilant as the market continues to unfold, watching closely for any signs of a bullish reversal.
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