Sonic’s TVL Drop and Market Sentiment

Sonic’s TVL dropped by $140M, indicating liquidity exit and strong downside pressure on price action.
Retail traders began selling after months of accumulation, increasing the likelihood of further price decline.

In recent days, Sonic (S) has declined by 11.25%, causing investors from the past month to record a 3.78% loss.

Currently, market activity remains bearish, with both retail and large investors—some linked to the decentralized protocol Aave (AAVE)—contributing to the decline.

Behind the Scenes of Sonic’s Liquidity Outflow

The price drop of Sonic can be traced to significant market outflow in the last 24 hours, indicated by the total value locked (TVL). According to DeFiLlama, Sonic’s TVL decreased by $140 million in just 24 hours, pulling the ecosystem to multi-week lows.

This decline coincided with a 10% drop in stablecoins deployed on Sonic, from $582.33M to $523.39M over the past week. In short, liquidity is leaving quickly and not returning.

These withdrawals imply both retail users and larger entities are unwinding their positions and exiting exposure.

Could Protocol Whales Be Behind the Drop?

Aave’s protocol activity on Sonic hasn’t fared any better. Over the past week, Aave’s TVL dropped by 27.28%, the largest decline among major Sonic-linked protocols. Such a decline may suggest that large holders are driving the outflows.

AMBCrypto analyzed the behavior of large holders in the market. According to the Large Holder Netflow—tracking the inflow and outflow activity by major players—2 million FTM was sold. At the current price, this group sold $950,000 worth of tokens in the past 24 hours alone. If this trend continues, Sonic is likely to slide further.

Spot Traders Join the Action

Spot traders, typically retail investors, are also contributing to this trend. For the first time since March, this group recorded a weekly sell-off of Sonic. CoinGlass data indicates that investors sold over $300,000 worth of the asset.

When such a shift occurs after weeks of accumulation, it typically signals a highly negative market sentiment surrounding the asset’s next move. Most market indicators currently predict a further decline in Sonic’s value.