The Sonic Crypto Price Decline
The price of Sonic cryptocurrency, identified by the symbol ‘S’, is continuing a momentum of decreased value on the trading market. The ongoing devaluation is expected to gain pace in the upcoming weeks. This is, in part, due to the persistently bearish technical indicators, coupled with a slowing rate of activity within its ecosystem.
On June 13, the price of Sonic plummeted, registering a 15% slump to a new intraday low of $0.314. This drastic decline equates to over 68% deduction from its yearly peak. Such a massive dip presents a contrast to earlier this year when the Sonic market capitalization rose to $3.15 billion. Currently, however, the Sonic market is on the verge of falling below a capitalization of $1 billion.
Global Political Tensions Play a Role
Global geopolitics have exerted significant influence on the cryptomarket recently. On June 13, a noteworthy flight from risk assets was provoked by escalating geopolitical tension following a military attack on Israel by Iran coupled with threatening retaliation. Consequently, the global crypto market saw over a 7% decline in total value, with Sonic being among the most impact hit cryptocurrencies.
In a separate event, a temporary interest spike in Sonic was observed subsequent to Coinbase’s confirmation of an ‘S’ token listing. However, this effect did not seem to affect the bearish trend of Sonic’s value. On-chain data, also termed as blockchain data, remains decidedly bearish, suggesting that the Sonic network still shows signs of sustained weakness.
Sonic Ecosystem Experiences Decline
Data from Santiment, a big data platform for blockchain, indicates a substantial drop in the total value locked across DeFi protocols on Sonic. From almost $2 billion in May, it nosedived to $1.54 billion. This dip coincides with dropped TVLs (total value locked) of several key protocols, such as AAVE, Beets, Pendle and Silo Finance, witnessing a significant decrease of between 35 and 50% over the last month.
With the reduction in activity in the network, the revenues for Sonic have also significantly decreased. The Friday data revealed an egregious dip with daily on-chain revenues plummeting to a meagre $5,977 from the $42,000 earnings in May.
Liquidity Declines
Furthermore, the Sonic network is experiencing a contraction of liquidity. This is attributable to the decreased supply of stablecoin which has fallen by approximately $200 million throughout this year. Consequently, the user activity has downshifted noticeably. Funding rates at exchanges remain at a stalled negative stance, reflecting the prevalent bearish sentiment among traders. On May 13, the funding rate dropped to 0.05%—a week-long low, reaffirming traders’ declining confidence in Sonic with anticipation of further value drops.
Bearish Trend Prevails
Given the unfavourable on-chain metrics and the current ecosystem condition, Sonic may continue to struggle with downward pressure in the short term. Indicators of a strong recovery are minimal at best and would require a significant uplift in ecosystem activity and investor sentiment.
Sonic Price Analysis
The 1-day USDT chart suggests a continued downward trend in Sonic’s price in recent weeks. A significant breakage point was identified when the price value fell below the $0.32 mark – regarded as Sonic’s last robust support level. This drop places Sonic well under $0.38, a major low swing seen in April.
The Sonic price movements seem to align themselves within a falling broadening wedge, an indication of impending downward pressure should the price remain within these borders. Adding to this bearish setup, the 20-day simple moving average crossed below the 50-day benchmark, forming what represents a bad omen for traders – a death cross. This cross indicates that sellers are holding sway over the market market movement.
Another pessimistic indicator of Sonic price decline is presented by the downwards orientation of the MACD (Moving Average Convergence Divergence) lines. Combined with the Aroon Up at 0%, as opposed to the elevated Aroon Down, these metrics suggest that the downtrend is still gaining momentum.
Further Slides or Potential Recovery?
Gains, in the light of the mentioned setup, lead to a conclusion that Sonic’s price may continue to go down, potentially reaching the next psychological support level around $0.30. Hypothetically, if the buyers manage to sway the tide and elevate the price above the upper boundary of the wedge, this could signal a potential bullish turnaround. This could potentially push the token’s price back over the $0.399 mark, aligning with its 20-day moving average.
The above insight is for educational purposes and should not be considered as an investment advice. Consult with a professional before making any investment decisions.
