Sonic Plummets 17% in 24 Hours Amidst Bearish Market Sentiment
1min read Sonic [S], previously known as FTM, has experienced a significant decline of 17.22% in the past 24 hours, raising concerns about potential further losses. This drop comes after a period of successive market gains, with the asset rallying 31.11% in the past month and 21.75% in the past week.
The decline in Sonic's price can be attributed to a surge in liquidity outflow and increased selling pressure from derivative market traders. Key metrics, such as Open Interest (OI) and trading volume, point to a bearish outlook for the asset in the coming days. OI has declined notably, dropping 19.44% to $114.13 million, suggesting contract closures in the market. Meanwhile, trading volume has grown 49.77% to $795.48 million in the broader market, further confirming the bearish sentiment.
Liquidation data also supports the bearish trend, with over $1.4 million liquidated in the market. Long positions lost $1.32 million, while short contracts lost only $81.05 thousand. This indicates that the market is moving in a downward direction and is likely to continue on this path until key market metrics change.
Liquidity has been flowing out of the Sonic market, with Total Value Locked (TVL) gradually decreasing. At the time of writing, the TVL had dropped from a high of $736.04 million on the 24th of February to a current level of $694.4 million, representing a total of $41.44 million removed from the market. If selling pressure continues to grow, the decline is expected to intensify.
The confidence of long traders in the market has weakened as the funding rate turns negative, suggesting that short-term traders are gaining dominance. With a reading of -0.0071, the market could continue to decline, as more short traders are paying a premium to maintain price disparity between the spot and derivative markets. Market sentiment indicates that Sonic is in its most bearish state and has a high likelihood of further price declines.
