Unlocking $74.59 million Sonic will cause the price to plummet by 42%?

Sonic (S) has officially launched a large-scale unlock event on July 5th, pumping an additional $74.59 million worth of tokens into the market.

According to data from DeFiLlama, the new token amount is equivalent to 5.17% of the total supply and 7.39% of the circulating supply.

The sudden increase in supply has raised concerns about oversupply, especially in the context where demand shows no signs of increasing correspondingly. If there is not enough buying force to absorb it, this imbalance will create significant selling pressure, leading to a deep price reduction risk in both the spot and derivatives markets.

Source: DeFiLlamaTherefore, the increase in supply is putting the market in a vulnerable position for sell-offs, especially if the demand is not strong enough to absorb the new tokens. Analysis shows that the likelihood of a corresponding buying wave appearing is quite slim, increasing the risk of a serious imbalance between supply and demand.

DeFi investors pull out first

At the time of writing, the market has begun to show clear signs of a sell-off. Notably, investors in the DeFi sector are the first to actively withdraw, as they start to significantly cut down on the amount of token S held in their portfolios.

Source: DeFiLlamaSpecifically, only during the period from July 3 to July 5, DeFi wallets dumped a total of S tokens worth up to 37.9 million dollars, pulling the total value held down from 836.44 million to 798.49 million dollars.

This strong outflow of funds indicates that investors are actively unlocking S on multiple platforms and withdrawing capital from the ecosystem, showing a clear shift from a long-term holding strategy to a defensive mindset and a trend of selling, reflecting a negative outlook on the short-term prospects of this token.

Sellers dominate the entire market

On-chain indicators show that the trend of withdrawal is no longer limited to the realm of DeFi investors. Retail investors are also starting to get involved, reflecting a more comprehensive change in market sentiment.

According to data on net flow through the exchange from CoinGlass, approximately $427,000 has been transferred from personal wallets to exchanges in the past week — a move often associated with the intention to sell and further reinforcing the increasing supply pressure.

Source: CoinGlassNotably, the strongest sell-off occurred in the last 24 hours, when spot investors dumped around 110,000 dollars worth of S tokens — equivalent to more than 25% of the total withdrawals for the entire week.

Meanwhile, the liquidation data from Coinalyze further clarifies the negative picture in the derivatives market. In perpetual contracts, the Long side was "swept" to $182,800, while the Short side only suffered a mere loss of $8.4.

This discrepancy reflects an overwhelming bias towards sellers: for every 1 dollar that the Short side loses, the Long side loses more than 21,000 dollars — a ratio that indicates the current market sentiment is heavily skewed towards sellers.

Source: Coinalyze## Will July repeat the unlocking tragedy of January?

To assess whether the scenario of a downturn may repeat, we will analyze the performance of token S during the most recent large-scale unlock.

Specifically, on January 4th, when the amount of Sonic tokens worth 998.72 million dollars was pumped into the market, the price immediately reacted negatively with a sharp decline.

Source: TradingViewFrom the local peak established on January 4, the price of token S plummeted 13.5% in just three days (until January 7, ). By January 20, the decline continued to widen, bringing the cumulative drop to 42.75%, marking a distinct local bottom.

As of now, token S has established a new local peak on June 25. Although this is not enough to confirm an upcoming price drop, if the support level at $0.302 is breached, the scenario of forming a lower bottom is very likely to recur — reflecting a new weakening cycle on the price chart.

Source: TradingViewWith the downtrend still dominating, coupled with increased supply pressure from the recent token unlock, Sonic is at high risk of continuing to decline and establishing a new lower bottom in the near future.

Minh Anh