Sonic [S] has experienced a prolonged period of decline, recording a substantial 27.11% weekly loss as market sentiment turns pessimistic.
The downward momentum seems to be gaining strength, with the asset plummeting by 9.53% under mounting pressure from whales. Recent insights from CryptoCrypto suggest that spot traders could potentially intervene to halt further price drops.
Whales Persist in Selling Sonic
Large investors, commonly referred to as whales, who hold a significant portion of an asset ranging from 0.1% to 1%, have shown a continued interest in offloading S.
Over the last 24 hours, data from IntoTheBlock indicates that this group divested 8.66 million S tokens valued at $5.41 million, contributing to the ongoing price slump.
The current sell-off represents a notable decline from the 65.17 million S tokens divested on January 21, hinting that whales might be nearing a point of fatigue.
Nevertheless, the market currently leans more towards bearish sentiment, with 131 bears compared to 114 bulls in the past week, translating to 6.94% more bears than bulls.
While whales persist in selling and possibly approaching exhaustion, CryptoCrypto’s findings suggest that a supply shortage could be on the horizon as spot traders take action.
Spot Traders Counter Whales
In contrast to whales’ activities, spot traders have initiated a gradual reduction in their exchange holdings over the last 24 hours.
Exchange netflow data reveals that a total of 1.05 million worth of Sonic was withdrawn from exchanges, signaling traders’ willingness to retain the asset for an extended period.
Such a move tends to slowly create a supply crunch as the available Sonic tokens diminish, which may not align with the existing demand.
The outcome depends on whether spot traders continue transferring their holdings to private wallets, potentially shifting the current weekly netflow from a positive $7.08 million to a negative value.
If this withdrawal from exchanges persists and if whale sell-offs reach peak exhaustion, S could foresee an upward rebound.
Incremental Rise in Volume
The overall volume of Sonic has continued to surge since January 1, kicking off with an initial volume of around $890,000 and surging to $15.47 million, as reported by DeFiLlama.
Typically, a growth in volume alone does not predict a bullish or bearish market direction. Nevertheless, if sentiments favor the bulls leading to a shift in price direction, S could witness a rapid upturn.
This is because a simultaneous increase in price and volume indicates robust buying momentum, propelling the asset towards a swift upward trajectory.