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Why did the price of S fall?

Sonic (S) dropped 0.57% to $0.255 in the past 24 hours, continuing a 14% decline over the week. Here’s why:

  1. Concerns about token dilution – Sonic recently issued $200 million in new tokens to support its U.S. expansion, which has made investors cautious.
  2. Oversold signals – The Relative Strength Index (RSI) is at 22.9, indicating the token might be oversold, but there’s no clear sign of a price rebound yet.
  3. Overall market weakness – General fear in the crypto market (CMC Fear Index at 39/100) is adding pressure on Sonic’s price.

Deep Dive

1. Token Supply Increase (Negative Impact)

What happened:
On September 1, Sonic Labs got nearly unanimous community approval (99.99%) to issue $200 million worth of new tokens. This move supports their Nasdaq-related projects and U.S. business expansion (MEXC News). Earlier, on September 9, 150 million S tokens (valued at $45 million at that time) were unlocked, increasing the circulating supply by 5%.

Why it matters:
Issuing more tokens can dilute the value of existing ones if demand doesn’t grow at the same pace. Given Sonic’s token price has dropped 69% since January 2025, investors are skeptical about the benefits of this U.S. expansion.

What to watch:

2. Technical Analysis (Mixed Signals)

Current status:
Sonic’s price is 11% below its 7-day simple moving average (SMA) of $0.285 and is testing a key support level at $0.263 based on Fibonacci retracement. The MACD indicator is negative (-0.0052), showing downward momentum, but the RSI at 22.93 suggests the token is oversold.

What this means:
These indicators hint at a possible short-term bounce, but the absence of strong bullish signals and a large circulating supply (2.88 billion S tokens) make a sustained recovery difficult. If the price falls below $0.242, it could trigger automated selling.

Conclusion

Sonic’s recent price drop is driven by concerns over increased token supply, weak technical indicators, and a cautious crypto market overall. While the oversold condition might attract short-term buyers, the main challenge is proving that Sonic’s U.S. expansion will actually increase demand for the token.

Key level to watch: Can Sonic maintain support between $0.242 and $0.263 through September 25?


What could affect the price of S?

Sonic (S) is navigating a mix of opportunities and risks tied to its growing ecosystem and token supply changes.

  1. Token Unlocks & Airdrops – On September 9, 150 million S tokens (5% of total supply) were unlocked, which could lead to selling pressure.
  2. U.S. Traditional Finance Expansion – A $200 million plan involving ETFs and Nasdaq PIPE has been approved, aiming to attract institutional investors.
  3. Fee Monetization & Developer Incentives – Developers receive 90% of app fees, encouraging ecosystem growth.
  4. Technical Indicators Show Weakness – The Relative Strength Index (RSI) is very low (22.93), signaling oversold conditions, but prices remain below key moving averages, indicating weak momentum.

Deep Dive

1. Token Supply Dynamics (Bearish/Mixed Impact)

What’s happening: On September 9, 150 million Sonic tokens worth about $45 million were unlocked, increasing the circulating supply by 5%. At the same time, 190.5 million tokens are being distributed through airdrops, with more U.S. participants becoming eligible.

Why it matters: While airdrops help bring new users into the ecosystem, sudden increases in token supply often lead to price drops. This unlock happened during a period when Sonic’s price has already fallen 68% over the past year, increasing the risk that holders might sell their tokens and push prices down further (BlockBeats).

2. U.S. Institutional Push (Bullish Impact)

What’s happening: A governance proposal was nearly unanimously approved to allocate $200 million in Sonic tokens toward creating a Nasdaq PIPE vehicle, developing an ETF, and establishing Sonic USA LLC (MEXC News).

Why it matters: Gaining regulatory approval for ETFs can attract large institutional investors, which historically helps boost token prices. However, tokens linked to Nasdaq will be locked up for three years, which means liquidity will be limited in the short term. This creates optimism for the medium term but some uncertainty right now.

3. Fee Monetization & Developer Incentives (Bullish Impact)

What’s happening: Sonic’s FeeM program gives developers 90% of the fees generated by their apps, supported by a $200 million Innovator Fund. Recent partnerships with platforms like 1inch and Chainlink, along with over $328 million in real-world asset tokenization, show growing usage (Sonic Whitepaper).

Why it matters: By sharing fees with developers, Sonic encourages more app development and network activity, similar to how Ethereum’s ecosystem has grown. However, ongoing success depends on continued growth in decentralized finance (DeFi) and competition within the sector.

4. Technical & Sentiment Risks (Bearish Impact)

What’s happening: Sonic’s price is currently $0.255, trading below key moving averages (7-day average: $0.285, 200-day average: $0.401). The RSI is at 22.93, indicating the token is oversold. Market sentiment remains cautious, with a Fear & Greed Index score of 39.

Why it matters: Although the low RSI suggests a potential price bounce, weak trading volume (down 24.89% in 24 hours) and a large circulating supply (2.88 billion S) mean that a sustained recovery will require strong buying interest.

Conclusion

Sonic’s price outlook depends on balancing momentum from traditional finance initiatives against the risks posed by token unlocks and supply increases. Keep an eye on the September 29-30 Singapore Summit for possible partnership announcements and updates on ETF regulations. The key question remains: can growth driven by FeeM and app development offset the dilution effects from token unlocks?


What are people saying about S?

The Sonic (S) community is split between hopeful optimism and cautious realism as the token faces downward pressure. Here’s what’s making headlines:

  1. Meme-driven price hopes ($10–$100) contrast with a 68% yearly drop
  2. $200 million U.S. airdrop sparks debate over potential selling pressure versus user growth
  3. Ecosystem expansion through Coinbase listing and DeFi partnerships
  4. Technical traders focus on $0.38 as a critical resistance level

Deep Dive

1. @SpacePoernchen: "$100 Sonic or bust" — bullish

"To all my Sonic $S holders, just a few more years and you can sell Sonic $S at $100 🤗"
– @SpacePoernchen (5.2K followers · 12K impressions · 2025-09-16 09:20 UTC)
View original post
What this means: This shows strong confidence from some holders expecting big growth. However, the $100 target is extremely optimistic—about 394 times the current price of $0.254—and lacks solid financial backing.

2. @blockzhub_cn: $200M U.S. airdrop plan — mixed

"Sonic Labs will distribute $200 million worth of $S tokens"
– @blockzhub_cn (28K followers · 47K impressions · 2025-09-01 18:28 UTC)
View original post
What this means: In the short term, this could put downward pressure on the price as more tokens enter the market. But in the long run, it might help grow the user base in the U.S. Despite this, the token is still down nearly 20% this month.

3. @renksieth: Bridging traditional finance — bullish

"From DeFi to TradFi, $S is positioning itself for ETF-level impact!"
– @renksieth (16K followers · 8.3K impressions · 2025-09-12 14:06 UTC)
View original post
What this means: Sonic is making moves by partnering with big players like Coinbase Custody and NASDAQ-listed firms, which is a positive sign. However, with a market cap of $730 million, it’s still early days for widespread adoption.

4. Coinpedia: Technical chart pattern — neutral

"Sonic has formed a double-bottom pattern near $0.3832 resistance, with MACD indicating a possible bullish crossover"
– Coinpedia analysis (2025-07-31 12:48 UTC)
View article
What this means: The price action is neutral until Sonic breaks above $0.38, which is about 49% higher than the current price and matches July’s recent high. If it fails to break through, the price could drop back to June’s low near $0.24.

Conclusion

Overall, opinions on Sonic are mixed. Developers highlight progress in connecting with traditional finance, while traders remain cautious due to weakening momentum. The ecosystem is growing, with $1.2 billion in total value locked (TVL) and positive regulatory steps in the U.S., but the token has dropped over 24% in the last 60 days. Keep an eye on the $0.31 to $0.38 range this week—breaking above could confirm a bullish trend, while falling short might speed up the decline.


What is the latest news about S?

Sonic is managing token releases while expanding into traditional finance and building developer interest. Here are the key updates:

  1. $45M Token Unlock (September 9, 2025) – 150 million S tokens (5% of total supply) were released, which could lead to short-term selling.
  2. $200M U.S. Expansion Approved (September 1, 2025) – The community approved a plan involving an ETF, Nasdaq PIPE investment, and opening an office in New York City.
  3. $40M Ecosystem Funding (September 3, 2025) – Sonic invested strategically in validator operations using zero-coupon bonds paid in S tokens.

Deep Dive

1. $45M Token Unlock (September 9, 2025)

Overview:
On September 9, Sonic released 150 million S tokens, which is 5% of the circulating supply, as part of a scheduled release plan. This coincided with a 14% drop in the token’s price over the week, down to $0.255. However, selling pressure seems limited so far, with 24-hour trading volume at $81.9 million.

What this means:
This event is somewhat negative in the short term because more tokens are available to sell. But it’s manageable since Sonic’s daily trading volume is about 11.2% of its supply, indicating decent liquidity. Keep an eye on token movements to exchanges this week to see if holders are selling (BlockBeats).

2. $200M U.S. Expansion Approved (September 1, 2025)

Overview:
Token holders approved a major plan to use $200 million worth of S tokens for:

What this means:
This is a positive long-term move toward gaining institutional support, but it will increase the total token supply by about 6.2%, which could dilute value. To balance this, Sonic plans to update its fee structure to increase token burns, linking token destruction to network activity (MEXC).

3. $40M Ecosystem Funding (September 3, 2025)

Overview:
Sonic Labs invested $40 million in SonicStrategy, a related company, through zero-coupon convertible bonds paid in S tokens. This funding will support validator operations, treasury management, and other blockchain investments.

What this means:
This is a neutral development—it strengthens the network’s infrastructure but locks up liquidity for six months. Using S tokens instead of stablecoins shows confidence in the token’s value and utility (CoinDesk).

Conclusion

Sonic is balancing short-term risks from token unlocks with strategic moves to gain institutional credibility through ETFs and Nasdaq involvement. The key question is whether increased fee burns and network use can offset the dilution from the $200 million expansion. Watch for updates on token burns and ETF filings in the coming weeks.


What is expected in the development of S?

Sonic’s roadmap is focused on growing its ecosystem and bringing in institutional investors.

  1. US Expansion & ETF Development (Q4 2025) – Building partnerships with traditional finance firms and preparing for regulatory approval.
  2. Fee Monetization Launch (September 2025) – Developers will earn 90% of the fees generated by their apps.
  3. Sonic Summit Singapore (September 29–30, 2025) – Updates on the ecosystem and new partnerships.

In-Depth Look

1. US Expansion & ETF Development (Q4 2025)

Overview: On September 5, 2025, a governance vote approved allocating $50 million to create a U.S. Exchange-Traded Fund (ETF) and $100 million for a PIPE (Private Investment in Public Equity) linked to NASDAQ. Sonic USA LLC will be set up in New York to handle regulatory compliance and attract institutional investors.

What this means:

2. Fee Monetization Launch (September 2025)

Overview: FeeM, explained in Sonic’s mainnet documentation, lets developers earn 90% of the network fees generated by their decentralized apps (dApps).

What this means:

3. Sonic Summit Singapore (September 29–30, 2025)

Overview: This major event, held just before TOKEN2049, will highlight new partnerships like the 1inch integration and demonstrate SonicVM’s ability to handle 400,000 transactions per second (TPS).

What this means:

Conclusion

Sonic’s roadmap combines immediate incentives for developers through FeeM with longer-term institutional strategies like the ETF and NASDAQ initiatives. The current price of $0.256 shows some skepticism about execution risks, but positive results from the Sonic Summit or progress on the ETF could improve market sentiment. Keep an eye on: trading volume spikes around September 29 and how quickly FeeM is adopted.


What updates are there in the S code base?

Sonic’s latest updates focus on improving scalability and creating better economic incentives for users and developers.

  1. Token Burn Upgrade (September 16, 2025) – Changed how fees are handled to reduce inflation by burning more tokens.
  2. Pectra Compatibility Testnet (August 12, 2025) – Added support for Ethereum’s Pectra upgrade to improve smart contract performance.

Deep Dive

1. Token Burn Upgrade (September 16, 2025)

Overview:
Sonic introduced a new system that burns (permanently removes) a portion of transaction fees to help control inflation. Specifically, half of the fees from regular transactions are now burned, while the rest goes to validators who help secure the network.

Here’s how fees are split now:

This change aims to balance the new tokens created each year (about 1.5% inflation) by reducing the total supply through burning, while still rewarding developers and validators.

What this means:
This is good news for Sonic (S) holders because burning tokens creates deflationary pressure, which can help keep the token’s value stable or increase it over time. Users benefit from less inflation risk, and developers keep more of the fees generated by their apps.

(Source)

2. Pectra Compatibility Testnet (August 12, 2025)

Overview:
Sonic’s test network now supports Ethereum’s Pectra upgrade, which improves how smart contracts run on the network. This includes 11 Ethereum Improvement Proposals (EIPs), such as:

Developers can now build and test smart contracts that are compatible with Ethereum’s latest features on Sonic’s custom Ethereum Virtual Machine (SonicVM).

What this means:
While this update doesn’t immediately affect users, it’s a positive step for developers. It makes it easier to move apps between Ethereum and Sonic, encouraging more projects to build on Sonic. Node operators (those running the network) will need to update their software before the main network launch.

(Source)

Conclusion

Sonic is making important technical and economic improvements to become a faster and more attractive blockchain for developers and users. The new token burn system helps control inflation, while the Pectra upgrade aligns Sonic with Ethereum’s latest technology, supporting future growth.

Could these changes help Sonic (S) recover from its recent -68% yearly price drop?