Sonic drops 12% as on-chain activity signals further selling

Rising user activity on Sonic masks a liquidity drain that leaves the token exposed to more downside.

Sonic SVM fell 12% to extend its monthly decline to 25%, as a surge in on-chain activity correlated with capital outflows rather than fresh demand.

"The rise in daily active users and transaction count is tracking selling, not accumulation," according to Artemis data, which showed DAUs climbing 22.6% week-over-week to 7,600 while on-chain transactions hit 228,000.

DefiLlama data showed total value locked on Sonic dropped $4.47 million to $16.07 million over the same period, even as decentralized exchange volume surged to $3.27 million — its second-highest reading of the month. Sonic's own trading volume rose 51% on the day to $26.8 million, with the combination of rising volume and falling price pointing to sellers maintaining control.

Spot market activity remained muted, with net inflows of roughly $20,000 on total buys of about $231,000 across the week — too thin to absorb the selling pressure. Without a meaningful pickup in accumulation, S faces further downside risk in the near term.

The divergence between user growth and capital retention highlights a structural weakness for the Sonic SVM ecosystem. While the Solana-based gaming layer has attracted users — DAUs rose from 6,200 to 7,600 in seven days — those users appear to be transacting and exiting rather than committing capital. TVL has now declined in three of the past four weeks, according to DefiLlama, suggesting that liquidity providers are pulling funds faster than new participants are arriving.

For S holders, the key risk is that elevated DEX volume and trading activity sustain the selling momentum. The token's 30-day loss of 25% already outpaces many Solana ecosystem peers, and thin spot buying offers little buffer against another leg lower.

This article is for informational purposes only and does not constitute investment advice.