Sonic Drops 13% as Bearish Trend Persists, No Reversal in Sight

Sonic, a digital asset, has recently experienced a downturn, failing to maintain the 78.6% retracement level established during its February rally. The token's price surge in early March initially suggested a continuation of the previous uptrend, but it ultimately resulted in a retest of the former support zone as resistance. This bearish flag pattern, as highlighted in earlier analyses, has materialized, with the price testing the $0.448 level. Indicators suggest that bearish sentiment remains prevalent.

The 4-hour chart reveals a strong bearish trend, with the price setting lower lows since the final week of February. The recent losses, accompanied by increased selling pressure, reinforce the dominance of sellers. The On-Balance Volume (OBV) has fallen below the lows where the February rally began, indicating heavy selling volume in recent weeks. The Money Flow Index (MFI) dipped below 20 and saw a brief bounce alongside the price, but this is likely to be short-lived. There are no signs of a trend reversal yet, and a move to $0.374 appears likely.

Open Interest (OI) has been waning in the past week as prices struggled to climb higher, showing a lack of bullish conviction among derivatives traders. However, in recent hours, the spot Convergence Divergence (CVD) began to climb higher, and the OI jumped by nearly $4 million in two hours. These developments could pave the way for a small price bounce, but nothing substantial. The liquidation heatmap shows that the area above $0.5 is the next liquidity target. The $0.522 level aligns well with the technical analysis, but it is unclear if Sonic is preparing for this 13% price bounce.

Traders of Sonic can use any potential price bounce as an opportunity to sell, rather than attempting to long any potential bounces. A trend reversal is unlikely at this time; Sonic would need to climb past $0.622 for this shift to occur. The token is set to move toward its November lows, with the current bearish trend showing no signs of abating. The lack of bullish conviction among derivatives traders further supports this outlook.