SONM (SNM) Coin Rallies 7,000% — Massive SONM Dump Ahead?

SONM (SNM) Coin Rallies 7,000% — Massive SONM Dump Ahead?
SONM (SNM) Coin Rallies 7,000% — Massive SONM Dump Ahead?

Lucknow(Coinchapter.com): On Nov 20, a lesser-known coin, SONM (SNM), made headlines after rising by a mammoth 7,000% to a new record high of $13.9.

However, soon after the rise, the price collapsed by 90% and traded in the red on Nov 21. With many users suggesting that SNM was the victim of another pump and dump, CoinChapter analyzed on-chain data to evaluate such claims.

SNM/USD Daily Chart
SNM/USD Daily Chart, Source: TradingView

What is SONM (SNM) coin?

The SNM project kickstarted in 2017 following the decentralized computing boom on Ethereum’s smart contract applications. Unlike centralized computing, which relies on a server-client model, decentralized computing removes the authority of a centralized network to hold and distribute information to the client (end-users).

According to its blog, “The emerging decentralized computing networks can benefit scientific projects requiring higher computational powers, as well as site hosting, game servers, neural network projects, and CGI tasks.”

Similarly, SNM provides cloud services based on decentralized computing and offers customers-level hardware, including PCs, mining equipment, and servers. Through its native token, SNM, traders can access the resources the SONM platform provides and trade computing powers utilizing SNM.

SNM Price Pump

The SNM coin surprised onlookers on 20 November after spiking by nearly 7,000%. A single candlewick (see chart above) even extended up to $13.9 before pairing gains later during the day. The decline resumed on Nov 21, and a series of 2 large red candles marked a vicious market sell-off.

Several social media users swiftly observed the price movement, but many pointed out several oddities. Some said the project was ‘dead since the official website had not been updated in a while. while others alleged yet another crypto pump and dump.

Source: Twitter

A user even tweeted that SNM carried significantly low liquidity, and the exchange volume was possibly manipulated by a series of accounts buying and selling the token.

Source: Twitter

Gains Backed by Insipid Fundamentals

Looking at data from IntoTheBlock added some wings to the theory. As per ITB, the pump was largely influenced by a sudden spike in large holders’ Netflow, which owns more than 0.1% of a token’s circulating supply.

Meanwhile, the total number of on-chain transactions was mostly pat. This suggested that retail investors and traders were mostly missing from the rally.

What is SONM (SNM) coin?
Large Holders Netflow, Source: IntoTheBlock
SNM Price Pump
Number of daily transactions, Source: IntoTheBlock

Elsewhere on EtherScan, a little under 11,000 users held SNM tokens.

Out of these, most of SNM’s supply is concentrated in 3 wallets. Binance holds 31.7 million tokens, accounting for 71.4% of the coin’s total supply. Meanwhile, 8.2% of the total supply is held by wallets ranked 5, 6, and 7.

Data showed that some top holders (excluding Binance) had been involved in large purchases over the past few days.

SNM token holders
SNM token holders, Source: etherscan

However, some of the abovementioned whale addresses had already begun cashing out a significant portion of their holdings. This triggered a massive collapse in price, with SNM coin falling by 79% on November 21.

SNM large holders' wallet activity
SNM large holders’ wallet activity, Source: etherscan

Technical analysis – More pain in store

SNM/USD 4-hour
SNM/USD 4-hour, Source: TradingView

From a technical perspective, the price will likely slip further during the week.

The 4-hour candles were parked below their 4H 20 Simple Moving Average, indicating further bearishness to follow. The RSI was also dangerously close to slipping beneath the 50-mark – a development that would invite short traders to the fray.

Investors should brace for a further price reduction if SNM coin fails to gain a foothold at $0.911.

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SONM, SONM (SNM) Coin Rallies 7,000% — Massive SONM Dump Ahead?

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