Sonic to see a minor price bounce? Reclaiming $0.622 is key
The $4 million OI increase and uptick in spot demand could see Sonic make a short-term price bounce toward $0.5.
- Sonic traders can use a price bounce to sell, instead of trying to long any potential bounces.
- A trend reversal was unlikely at press time- S would need to climb past $0.622 for this shift.
Sonic [S] has failed to defend the 78.6% retracement level plotted based on the rally in February. The token saw a price surge in early March that seemed to suggest the previous uptrend could continue.
Instead, it turned into a retest of the former support zone as resistance.
The bearish flag pattern highlighted in an earlier analysis has played out, and the $0.448 level has been tested. The indicators showed that bearish sentiment remained prevalent.
Sonic set to move toward November lows
The 4-hour chart showed a strong bearish trend. The price has only set lower lows since the final week of February. The losses over the past 36–48 hours were accompanied by a spike in trading volume.
This increased selling pressure reinforced the idea that sellers were dominant. The OBV confirmed this idea, falling below the lows where the rally in February began. This indicated heavy selling volume in recent weeks.
The MFI dipped below 20 and saw a bounce alongside the price, but this would likely be short-lived. There was no sign of a trend reversal yet, and a move to $0.374 appeared likely.
The Open Interest has been waning in the past week as prices struggled to climb higher. This showed a lack of bullish conviction among derivatives traders.
Yet, in recent hours, the spot CVD began to climb higher, and the OI jumped by nearly $4 million in two hours at press time.
These developments could pave the way for a small price bounce, but nothing substantial. The liquidation heatmap showed that the area above $0.5 was the next liquidity target.
The $0.522 level lined up well with the technical analysis, but it was unclear if Sonic was preparing for this 13% price bounce.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
