- Sonic broke out of a triple bottom pattern, signaling a potential trend reversal.
- Daily transactions surged from about 240K to about 600K in 10 days.
Sonic’s [S] price action suggested a potential shift in outlook that was backed by 8% gains in a day and a potential reversal in daily transactions that had been in a downtrend since the end of February.
Sonic price action and prediction
Sonic’s daily chart had successfully broken out from a well-defined three-wave pattern that started from the $0.30 price range.
Crossings of support at the $0.30 range after three matching price dips indicated the growing interest of buyers every time the base area got tested.
The price traded at $0.34 above two resistances, including the neckline and descending trendline, which constrained prices since February.
The continuation of this momentum suggested a 130% price increase toward $0.65 if the breakout movement held. That way, the price action matched the projection that originated from the swing low at $0.30.
Source: TradingView
The substantial increase in volume reinforced breakout conviction due to accumulation signs.
The expected resistance barriers on the appeared minimal, as the Ichimoku cloud area ahead contained only sparse levels of resistance.
The bullish structure for Sonic would become invalid if its price dropped beneath the $0.30 zone to close below the neckline.
If price falls below this level, it would indicate an upcoming bout of bearish pressure or additional period of consolidation.
The convergence of bullish signs between $0.32 to $0.30 represented respective levels of support for a reversal upswing or breakout failure.
Taking additional steps for confirmation along with caution became vital as prices started the month of May.
Sonic daily transactions surge
The number of daily transactions at Sonic increased sharply from 240,000 to 593,412 over the last ten-day period up to the end of April. The active user pattern indicated a strong recovery from the mid-April decline.
Price volatility was typically observed after episodes of higher-than-average transaction volumes in February.
This could be interpreted as an indication that on-chain activity growth can be followed by upward trends if more conditions aligned.
Source: Sonic
The latest surge in transactions aligned with the triple bottom pattern’s breakthrough.
However, the price increase did not only depend on sustained transaction growth remaining at its present levels, but more factors like volume and liquidity.
Alternatively, the price momentum could suffer if the current transaction levels fell, but price targets would gain strength if transactions rose.
Project valuation
The 0.91% Mindshare/FDV ratio of Sonic indicated high attention levels from investors regarding its $1.6 billion FDV, thereby hinting that Sonic was undervalued.
Meanwhile, the ratios of CELO, BERA, and KAIA exceeded 0.3 consistently.
Source: dexu.ai
Cardano’s [ADA] 0.13% mindshare opinion appeared weak relative to its $31.2B fund distribution value. However, the figure indicated fundamental analysis was not enough to base the predictions.
It showed that Sonic’s expansion story could gain additional investor attention. This would benefit their growth potential even if legacy chains experience lower levels of relative engagement.
