Sonic (formerly known as FTM) has witnessed a remarkable 500% spike in trading volume, surging to $114 million within the last 24 hours. While the price of Sonic has risen by 1.8%, this substantial increase in trading activity has occurred alongside conflicting technical indicators, making its future price movement uncertain. Traders are left to assess whether Sonic can maintain its upward momentum or if a reversal is on the horizon.
ADX Signals Strong Trend Momentum
The Average Directional Index (ADX) for Sonic has seen a considerable rise, increasing from 21.9 to 35.6 over the last two days. This surge suggests a solid and strengthening uptrend in the asset. The ADX is a valuable tool for measuring the strength of a trend, with values above 25 signaling a robust market trend. With the ADX currently at 35.6, it indicates a significant degree of momentum in Sonic’s price action. This suggests that if buying pressure remains consistent, the uptrend could continue, allowing Sonic to test higher price levels.
Moreover, the formation of a golden cross on the Exponential Moving Average (EMA) lines further supports the bullish outlook. A golden cross occurs when a short-term moving average crosses above a longer-term moving average, which is typically seen as a sign of increasing bullish strength. The combination of the rising ADX and the golden cross formation suggests that Sonic might be positioned to continue its upward trend in the near term.
BBTrend Indicates Growing Bearish Pressure
However, not all indicators are pointing toward a continuation of the bullish trend. The BBTrend indicator, which is derived from Bollinger Bands, currently stands at -6.8, a sharp drop from -2.4 just hours earlier. This negative reading indicates that bearish pressure is mounting, which could hinder Sonic’s upward momentum. The BBTrend is used to assess the strength and direction of a trend, with negative values generally signaling a weakening bullish trend or increasing bearish sentiment. If this downtrend continues, Sonic may struggle to maintain its recent gains.
Resistance and Support Levels to Monitor
Despite the bearish signals, Sonic’s price is currently testing important resistance levels. One key level to watch is $0.87, where the price has faced resistance. If Sonic can break above this level, it could pave the way for a further price surge, with the next major target being $1.06. This represents an approximately 34% upside potential from current price levels. A break above these resistance levels would suggest that the bullish momentum is intact and could drive the price to even higher levels.
On the flip side, the downside risk is also significant. If Sonic fails to maintain its current momentum and dips below the $0.74 support level, it could signal a reversal in price direction. A break below $0.74 would expose Sonic to further downside, with the next support level at $0.61. If the price continues to drop, it may indicate the onset of a bearish trend.
Uncertain Outlook Amid Conflicting Signals
While the recent price action and volume surge have led to optimism, the conflicting signals from the technical indicators present a mixed outlook for Sonic. The strong trend strength suggested by the ADX and the bullish golden cross are countered by the bearish signals from the BBTrend indicator, indicating growing pressure on the price. Traders should remain cautious and monitor key support and resistance levels to gauge whether the bullish momentum can prevail or if a reversal is imminent.
In conclusion, Sonic’s market performance is at a crossroads, with significant price levels to watch in the coming days. Investors will need to stay alert to both the bullish and bearish signals as the asset tests critical price points. The next few days will be crucial in determining whether Sonic can extend its uptrend or if it will enter a period of consolidation or decline.
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