Sonic [S] (formerly known as FTM) has displayed a strong bullish trend in recent weeks. After recovering from its losses earlier in February, the digital asset was moving closer to the $1 mark.
Currently, the $0.8 level is being tested for support, with indications that the bulls may step in to defend this level. Both momentum and volume suggest a favorable environment for buyers.
Potential for Continued Uptrend
An analysis of Sonic’s 4-hour chart reveals a robust uptrend. The price has been forming higher highs and higher lows since surpassing the $0.6 resistance level.
Previously, this resistance level acted as a barrier that led to a drop to $0.315 during the early February sell-off.
The recent upward movement has been supported by significant buying pressure, as evidenced by heightened buying volume, particularly in the past week.
Additionally, Sonic broke out above the $0.8 resistance level, signaling further upward momentum.
Confirming this observation, Sonic’s DMI indicators show both the +DI and ADX lines above 20, indicating a substantial uptrend.
The On-Balance Volume (OBV) has also surged alongside increased volume, surpassing previous lows marked in white.
While a drop below $0.75 may not reverse the bullish market structure, it could weaken momentum, potentially leading to a retracement towards $0.609 or $0.505.
Examining the liquidation heatmap reveals notable liquidity levels below $0.8 and between $0.95 to $1, representing potential price targets in the near future. A dip to $0.739 could shift liquidity in the downward direction.
In the event of forced long liquidations, the prevailing bullish sentiment could swiftly reverse these actions, maintaining control in the short term.
Traders in Sonic should remain cautious of a drop below $0.8, but such a move may not necessarily indicate a short opportunity. The range of $0.71 to $0.73 is anticipated to act as a demand zone in the lower timeframes.
Furthermore, breaching $1 could lead to a notable resistance at the $1.4 level.
Disclaimer: The views expressed are personal opinions and do not constitute financial advice, investment recommendations, or trading guidance.