Sonic (S) Price Rebounds 45% — Sets Up for a Potential Breakout

Key Takeaways

• Sonic (S) is following a long-term ascending support trend line
• The price trades inside a short-term descending wedge pattern.
• Can Sonic prevent a deeper correction by breaking out from the wedge?

The Sonic price has fallen over 70% since its cycle high in December 2024. A 45% bounce since Feb. 3 prevented a breakdown, but trades are still below several resistance levels.

Despite the decline, the are some positive Sonic news. Firstly, the Aave community has voted to deploy Aave v3 in Sonic, with an overwhelming 99.99% vote for yes. Secondly, the Sonic team has partnered with Arkham Intelligence to bring Sonic to its platform.

Sonic has also launched a Hackathon with a $295,000 prize pool that will continue until Feb. 24. Since then, its Total Value Locked (TVL) and Volume have increased.

With that in mind, let’s examine the S price movement and see if it can prevent a breakdown of the long-term support.

Sonic Price Returns to Support

Sonic’s weekly chart shows that the price has fallen without experiencing any sort of bounce since its 2024 high of $1.47 in December. The decline led to a low of $0.32 on Feb. 3, causing a breakdown from the $0.58 horizontal support area.

This is a critical area that has acted as both support and resistance since the start of 2023.

While the S price also seemed to break down from an ascending support trend line, it regained its footing (white icon) and is creating a bullish weekly candlestick.

The trend line has held for nearly 500 days, so staying above it is imperative for the S trend to remain bullish.

However, the $0.58 area will likely provide resistance in case Sonic’s price attempts to bounce.

*Note: The Fantom chart is used instead of the Sonic one because of the availability of more price history.

Technical indicators are decisively bearish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are both falling and have crossed their bearish thresholds at 50 and 0, respectively.

So, the weekly time frame suggests the S price will eventually break down from the ascending support trend line. If that happens, the next support will be at $0.22.

Sonic Price Breakout?

The daily time frame chart suggests that the S price will likely bounce in the short term. This is because of the price action, indicator readings, and wave count.

The price action shows that SONIC trades inside a descending wedge, a bullish pattern often leading to breakouts. The decline is a completed five-wave downward movement (black), meaning the S price has created a leading diagonal.

Additionally, the daily RSI and MACD have both generated strong bullish divergences (green), predicting that a breakout will happen.

In that case, the closest resistance will be between $0.77 and $0.90, created by the 0.382 – 0.5 Fibonacci retracement resistance levels.

However, because of the bearish long-term readings, this will likely be a relief rally before the S price breaks down to new lows.

Relief Rally Incoming

The Sonic price has struggled mightily since December 2024, falling over 70% until Feb. 3, 2025.

However, the price bounced 45% since its lows, preventing a breakdown from a long-term support level. Moreover, Sonic has created a bullish pattern that could lead to a $0.77-$0.90 breakout.

Having said that, the rally will likely provide relief before the bearish trend resumes to new lows.