3 Reasons Why Sonic (S) Might Struggle to Break the $0.64 Resistance

Key Takeaways

• Sonic’s price rallied 15% in the past week, pushing its price to $0.59, but signs suggest the uptrend could be fading.
• The one-week realized volatility has dropped to 82.69%  from 94.57%, signaling possible price consolidation.
• The IOMAP data shows a significant resistance zone at $0.64, where 593 Sonic addresses hold 1.19 billion S coins.
• A breakdown below the 0.618 Fib support at $0.56 could send Sonic tumbling to $0.49, the 0.238 retracement level.

Sonic (S) has surged 15% in the past week, pushing its price to $0.59. However, after this double-digit rally, the altcoin may struggle to maintain its upward momentum, despite earlier predictions that it could see a quick rally to $1.

This analysis reveals key reasons why Sonic’s price could struggle to sustain the uptrend and highlights potential short-term targets.

Sonic to Remain Range-Bound

One reason Sonic’s price might struggle to keep surging is realized volatility. Realized volatility measures the standard deviation of returns from a market’s average return.

High realized volatility signals periods of elevated risk and uncertainty in that market. However, a drop in the metric indicates reduced price fluctuations over a recent period.

According to Glassnode, Sonic’s one-week realized volatility is 82.69%. This is a notable drop from the 94.57% it was last Tuesday. The drop in volatility indicates a balance between buyers and sellers.

Sonic’s price may stay range-bound if sustained, with short-term consolidation likely. This could make it difficult for the altcoin to break key resistance levels, limiting its ability to build on the recent 15% weekly gain.

Heavy Resistance Ahead

Based on IntoTheBlock’s data, the significant resistance for the S coin rests around $0.64. This is according to the signs shown by the In/Out of Money Around Price (IOMAP).

The IOMAP tracks wallet addresses that bought tokens within specific price ranges, helping identify key support and resistance levels. Typically, higher ‘in the money’ volume signals more substantial support, while larger volume above the current price points to resistance.

The data shows 593 Sonic addresses hold 1.19 billion coins bought between $0.63 and $0.65, more than the volume accumulated between $0.50 and $0.60. This suggests that resistance at $0.64 is extreme.

Therefore, if the buying volume around Sonic fails to match this supply zone,  then the price might experience a pullback.

S Price Analysis: No Clear Rally Yet

From a technical perspective, the daily 4-hour chart also presented a bearish outlook. During this timeframe, the Chaikin Money Flow (CMF) dropped below the zero signal line to -0.13.

This decline in the CMF indicates rising selling pressure. Due to this dip in buying momentum, Sonic’s price might drop below the 0.618 golden ratio at $0.56.

If validated, the altcoin’s next move might be to decline to $0.49 near the 0.238 pullback point. However, if buying pressure increases, the CMF reading might climb above the zero signal line.

If that is the case, Sonic’s price might jump past the $0.59 resistance. If this happens, the cryptocurrency could rally above the $0.64 zone as well.