Why did the price of S fall?

Sonic (S) dropped 3.01% in the last 24 hours, adding to a 71% loss over the past 90 days. The main reasons are selling pressure from recent token giveaways (airdrops), negative technical signals, and weakening network activity, all happening amid broader market uncertainty.

1. Airdrop Sell-Off – 190.5 million S tokens were given out, increasing supply.
2. Technical Weakness – The Relative Strength Index (RSI) shows oversold conditions but no signs of a price rebound.
3. Declining Network Health – Total Value Locked (TVL) and on-chain activity are falling.

Deep Dive

1. Airdrop Sell Pressure (Negative Impact)

Overview: On December 23, Sonic Labs distributed 190.5 million S tokens (worth about $13.3 million at current prices) through its Season 1 airdrop. Although Andre Cronje, a key figure, burned 1.86 million tokens (around $75,000) to reduce supply, many recipients likely sold their unlocked tokens in a market with limited buyers.

What this means: Airdrops often lead to short-term selling as recipients cash out, especially when the market lacks strong demand. Sonic’s 24-hour trading volume is $26.4 million, down 6.45% compared to last year, so even moderate selling can cause big price swings.

What to watch: The upcoming Season 2 airdrop involves 92.2 million S tokens set aside for long-term rewards, which might ease immediate selling pressure.

2. Technical Weakness (Negative Impact)

Overview: Sonic’s price is about 90% below its 200-day exponential moving average (EMA) of $0.244, and the 14-day RSI is at 26.31, indicating oversold conditions. However, the MACD histogram remains negative (-0.0000965), showing no signs of upward momentum.

What this means: Even though the token looks oversold, low trading activity (turnover ratio of 0.13) and strong resistance near $0.079 (a key Fibonacci retracement level) suggest sellers still control the market.

Key level to watch: A steady move above $0.075 (7-day simple moving average) could hint at a short-term price recovery.

3. Declining Network Activity (Negative Impact)

Overview: Sonic’s Total Value Locked (TVL) has fallen 67% since May 2025, now at $367 million (The Defiant). Daily transaction counts are at their lowest point this year, according to social media reports.

What this means: Lower TVL and fewer transactions reduce investor confidence in Sonic’s platform, especially as competitors like Solana and Base continue to grow.

Conclusion

Sonic’s price drop reflects a combination of increased token supply from airdrops, negative technical indicators, and weakening network fundamentals. Key factors to watch: Whether the planned $50 million U.S. ETF initiative and changes in the Season 2 airdrop can improve market sentiment, or if Bitcoin’s 59% market dominance will keep altcoins like Sonic under pressure.

What could affect the price of S?

Sonic’s price is caught between growing interest from big investors and ongoing selling pressure.

1. U.S. Expansion (Positive) – Plans for an ETF and listing on Nasdaq could bring in institutional money.
2. Airdrop Unlocks (Negative) – 92.2 million $S tokens unlocking in Season 2 may lead to continued selling.
3. Fee Monetization (Mixed) – Developers earn most fees, encouraging app growth, but validators earn less, which could affect network security.

Deep Dive

1. Institutional Onboarding & U.S. ETF Push (Positive Impact)

Overview:
Sonic is expanding into the U.S. by creating Sonic USA LLC, planning a $50 million ETF allocation, and launching a $100 million PIPE fund listed on Nasdaq. CEO Mitchell Demeter aims to connect decentralized finance (DeFi) with traditional finance (TradFi) (Cointelegraph).

What this means:
If the U.S. ETF is approved, it could bring in regulated investment money, which has historically boosted prices (for example, Bitcoin ETFs brought in over $9.6 billion in 2025). However, approval depends on negotiations with the SEC, which is a major regulatory hurdle.

2. Airdrop Season 2 Unlocks (Negative Impact)

Overview:
About 92.2 million $S tokens (30% of the total 190.5 million airdrop) will become available in late 2025 or early 2026. In Season 1, Andre Cronje burned 1.86 million $S tokens to reduce selling pressure, but total value locked (TVL) still dropped 64% after the airdrop (CoinMarketCap).

What this means:
Tokens unlock gradually, which helps limit immediate selling, but roughly 30 million $S tokens (15% of circulating supply) entering the market each month could keep prices under pressure. Keep an eye on token burn rates—only 5% of fees from non-FeeM transactions are destroyed.

3. Fee Monetization & Developer Incentives (Mixed Impact)

Overview:
The FeeM system directs 90% of app fees to developers, supporting 227 active apps and generating over $2 million in revenue for builders. Validators, who help secure the network, receive only 10% of fees, which might reduce their motivation (Whitepaper).

What this means:
While this setup attracts developers (like those deploying Uniswap V3), low rewards for validators could risk the network’s decentralization and security. Continued growth in apps is important—TVL has stabilized at $202 million but remains far behind competitors like Solana, which has $40 billion.

Conclusion

Sonic’s price depends on successfully bridging traditional finance while managing the impact of token unlocks. The current price range of $0.06 to $0.07 matches a key technical level (Fibonacci 78.6% retracement), making it a critical point. If ETF progress slows, the next support level could be $0.04, the low from 2025.

Key question: Can Sonic’s U.S. expansion bring in enough new investment to balance out the 47.6 million $S tokens added annually through ongoing funding programs?

What are people saying about S?

The Sonic (S) community is feeling a mix of cautious hope and frustration as the $S token faces downward price trends and changes within its ecosystem. Here’s the latest:

1. Price challenges – The token is down 91.5% compared to last year, recently testing support around $0.06.
2. Ecosystem developments – Total Value Locked (TVL) bounced back by 40% in July 2025, and new U.S.-focused airdrops are stirring conversation.
3. Leadership changes – New CEO Mitchell Demeter (@MitchellDemeter) is focused on steadying growth.

In-Depth Look

1. @CryptoOHungry: Building a foundation during a bear market

"$S is holding steady around $0.16... TVL remains stable at $202 million, and perpetual contract volume is up 341%."
– @CryptoOHungry (26.8K followers · Oct 29, 2025)
View original post
What this means: This is a positive sign for $S if decentralized finance (DeFi) activity continues, but the price has dropped 71.7% over the past 90 days, showing weak demand despite strong on-chain activity.

2. @Defi_Maximalist: Price reality check

"JUST IN: Sonic $S falls below 10 cents 📉"
– @Defi_Maximalist (15.8K followers · Dec 1, 2025)
View original post
What this means: This is a bearish sign as $S breaks the key $0.10 support level. However, the Relative Strength Index (RSI) is at 27.3, indicating the token might be oversold and could see a short-term price bounce.

3. @SantoXBT: Institutional involvement outlook

"Sonic is moving at Wall Street speed... gearing up for ETF-level impact!"
– @SantoXBT (29.4K followers · Aug 31, 2025)
View original post
What this means: Neutral outlook. The planned U.S. expansion in 2025, including Nasdaq PIPE and ETF initiatives, could bring in institutional investors. However, there is a risk of dilution from 190 million new $S tokens entering circulation.

Conclusion

The overall view on $S is mixed. Technical indicators warn caution, with a 58.3% drop over the last 60 days, while developers highlight new revenue streams and institutional partnerships. Keep an eye on the upcoming @flyingtulip_ public sale in Q4 2025. This event could reveal whether Sonic’s DeFi platform can revive liquidity amid a broader crypto market fear index of 27. After all, does the blockchain’s impressive 400,000 transactions per second (TPS) matter if traders avoid tokens priced under $0.10?

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What is the latest news about S?

Sonic is managing token giveaways, security issues, and DeFi upgrades while trying to grow in a competitive market.

1. Airdrop Update (December 23, 2025) – Sonic is carefully distributing tokens and burning some to reduce selling pressure.
2. Wallet Freeze After Security Breach (November 3, 2025) – Sonic froze wallets after suspicious activity linked to a $128 million exploit involving Balancer.
3. SpookySwap Partnership (December 4, 2025) – New automated trading tools launched on Sonic to help users manage risk.

In-Depth Look

1. Airdrop Update (December 23, 2025)

What happened:
Sonic Labs distributed 190.5 million S tokens through community-approved airdrops. Out of these, 92.2 million S tokens are reserved for long-term ecosystem growth. Andre Cronje, a key figure in the project, burned 1.86 million S tokens (worth about $755,000) to reduce the total supply and help stabilize the token’s value. Despite some early selling after the first round of airdrops, the total value locked (TVL) in Sonic’s platform surpassed $1 billion after moving from the Fantom network.

Why it matters:
This approach balances rewarding users now while making the token scarcer over time, which can help maintain value. Reaching $1 billion in TVL shows strong interest from larger investors, but keeping users engaged will depend on how well Season 2 incentives work. (Source)

2. Wallet Freeze After Security Breach (November 3, 2025)

What happened:
Sonic Labs froze two wallets after detecting suspicious activity connected to a $128 million hack involving Balancer, a popular DeFi platform. This exploit affected multiple blockchains, including Sonic’s. Although most stolen funds have not been recovered, Sonic acted quickly to stop further movement of assets.

Why it matters:
This incident highlights the ongoing security challenges in decentralized finance (DeFi). Sonic’s quick response shows its commitment to protecting users. It also points to the need for advanced security measures, like those proposed by Naoris Protocol, which focus on protecting against future threats such as quantum computing attacks. (Source)

3. SpookySwap Partnership (December 4, 2025)

What happened:
SpookySwap, a decentralized exchange, integrated Orbs’ decentralized stop-loss and take-profit protocol (dSLTP) on Sonic. This allows users to set automatic limits on their trades to manage risk without manual intervention.

Why it matters:
This is one of the first times traditional financial tools like stop-loss orders have been implemented directly on a DeFi platform like Sonic. It makes Sonic more attractive to algorithmic traders and could increase trading volume and liquidity. This move reflects a growing trend toward more sophisticated tools in decentralized finance. (Source)

Conclusion

Sonic is making strategic moves to balance token supply, improve security, and offer better trading tools. However, challenges remain, including a 71% drop in token price over the past 90 days and regulatory hurdles as Sonic expands in the U.S. (approved in September 2025). The success of Season 2 incentives will be key to driving long-term growth, but broader economic factors could still impact progress.

What is expected in the development of S?

Sonic’s roadmap is focused on growing its ecosystem, attracting institutional investors, and improving its token economics.

1. Sonic Gems Airdrop (Ongoing) – Distributing the last 30 million $S tokens as rewards to community apps that increase user activity.
2. US Traditional Finance Expansion (2025) – Plans include launching a $50 million regulated ETF, investing $100 million in Nasdaq-related projects, and setting up Sonic USA in New York.
3. Fee Monetization Upgrades (2026) – Developers can earn a larger share of network fees (between 15% and 90%), encouraging more app development.
4. Global Institutional Growth (2026) – Expanding the New York office and building partnerships to attract institutional investors and high-frequency trading firms.

Deep Dive

1. Sonic Gems Airdrop (Ongoing)

Overview: Sonic Labs is currently distributing about 30 million $S tokens through its Gems program. This rewards apps that bring more users and activity to the platform (Sonic Labs). This follows an earlier airdrop of 49 million $S tokens via the Points program, with no minimum claim needed.

What this means: This is neutral for $S’s price. Airdrops help increase user engagement but can also lead to short-term selling if recipients cash out. The long-term benefit depends on keeping users active within Sonic’s decentralized finance (DeFi) ecosystem.

2. US Traditional Finance Expansion (2025)

Overview: Sonic’s governance has approved a plan to invest $50 million in a regulated exchange-traded fund (ETF), $100 million in Nasdaq-linked investments, and allocate 150 million $S tokens to establish Sonic USA LLC in New York (CryptoUsopp).

What this means: This is positive for $S. Institutional adoption can create steady demand and improve liquidity. However, there are risks such as regulatory delays and competition from other blockchain platforms like Solana.

3. Fee Monetization Upgrades (2026)

Overview: Sonic’s FeeM model allows developers to earn up to 90% of the fees generated by their apps on the network. Recent updates have increased the portion of fees burned (removed from circulation) to 90%, which helps make $S tokens scarcer (CryptoFrontNews).

What this means: This is bullish for $S. It aligns developer rewards with network usage, encouraging more high-traffic decentralized apps (dApps). The success of this depends on attracting popular apps to Sonic’s platform.

4. Global Institutional Growth (2026)

Overview: Led by CEO Mitchell Demeter, Sonic is expanding its New York office to strengthen relationships with traditional finance institutions and regulators. Partnerships with companies like Covalent will provide real-time data streaming, aiming to attract high-frequency trading (HFT) firms (XenaNFTs).

What this means: This is positive for $S. Institutional investments could reduce price volatility caused by retail traders. However, there are risks if market conditions worsen or regulatory challenges arise.

Conclusion

Sonic’s roadmap combines community incentives (like Gems and FeeM) with efforts to bridge traditional finance (ETF launch and NYC expansion). The goal is to evolve from a retail-focused blockchain into a regulated hybrid of decentralized finance and traditional finance. These initiatives could help stabilize $S’s price, which has dropped 71.7% year-over-year. Keep an eye on progress with ETF approvals and developer adoption.

How will Sonic’s shift toward institutional investors affect its commitment to decentralization?

What updates are there in the S code base?

Sonic has recently updated its technology with important improvements to boost security, scalability, and incentives for developers.

1. Mandatory Node Upgrade (November 1, 2025) – Includes security fixes and fee discounts ahead of the mainnet’s Pectra compatibility.
2. Covalent Integration (September 10, 2025) – Enables real-time data access for high-frequency trading bots and AI applications.
3. Testnet 2.1 Launch (August 12, 2025) – Adds compatibility with Ethereum’s Pectra upgrade.

Detailed Overview

1. Mandatory Node Upgrade (November 1, 2025)

What happened: Sonic Labs required all node operators—including validators, RPC providers, and exchanges—to upgrade to version 2.1.2. This update prepares the network for the upcoming Pectra-compatible mainnet launch by adding security patches and fee subsidies for decentralized apps (dApps).

All nodes must upgrade by November 3, 2025, 9:00 AM EST to avoid being disconnected from the network. This upgrade lowers validator costs by about 66% and strengthens the network against certain attacks that try to overwhelm it with fake identities.

Why it matters: This is positive news for Sonic (S) because it makes the network more secure and affordable for developers, which is important for attracting institutional users. Ensuring all nodes upgrade smoothly helps prevent downtime during the mainnet transition.
(Source)

2. Covalent Integration (September 10, 2025)

What happened: Sonic partnered with Covalent to provide ultra-fast blockchain data queries. This is especially useful for high-frequency trading (HFT) bots and AI-powered decentralized finance (DeFi) apps that need real-time information.

By combining Sonic’s high transaction speed (400,000 transactions per second) with Covalent’s “Data Co-Processor,” developers can now access detailed Sonic network data in milliseconds without delays caused by traditional data requests.

Why it matters: This update mainly benefits developers building advanced applications. While it doesn’t directly impact Sonic’s price, better tools could attract more sophisticated trading strategies, which might increase network activity over time.
(Source)

3. Testnet 2.1 Launch (August 12, 2025)

What happened: Sonic released Testnet 2.1, which supports Ethereum’s Pectra upgrade. This includes new Ethereum Improvement Proposals (EIPs) like ERC-7677 (wallet smart contracts) and ERC-4337 (account abstraction).

The update also improved SonicVM, Sonic’s Ethereum Virtual Machine (EVM) runtime, reducing gas fees by about 18% for complex transactions. Developers can now test Pectra features before Sonic’s mainnet upgrade planned for late 2025.

Why it matters: This is good news for Sonic (S) because aligning with Ethereum makes it easier for developers to build cross-chain projects. It could attract Ethereum-based projects looking for lower fees and faster transaction speeds.
(Source)

Conclusion

Sonic’s recent updates focus on improving security, Ethereum compatibility, and fast data access—key factors for its goal to become a leading platform for decentralized finance (DeFi) and real-world assets (RWA). With mandatory node upgrades ensuring network stability and Covalent integration enabling advanced trading strategies, Sonic (S) aims to leverage these technical improvements to recover from its recent 71% price drop over the past 90 days.