Sonic [S] needs to break THIS level to reach $1 – Can it happen?

• FTM seems to be on a recovery but needs to break above the descending trendline to confirm the start of a rebound.
• However, with the adoption rate declining potentially from FTM to S, the potential breakout could be hindered.

The price action chart of Sonic [S] indicated that it’s currently testing a critical phase of potential recovery, evidenced by its interaction with a descending trendline.

However, FTM needs to decisively break above this trendline, which currently stands around $0.4558, to confirm a bullish reversal.

Supporting this potential breakout is the MACD showing a convergence of its signal and MACD lines, hinting at a reduction in downward momentum.

Meanwhile, the RSI at 41.63 remained below the typical ‘overbought’ threshold of 70 at press time, suggesting that there was room for uptrend without immediate overextension.

If Sonic successfully breaks above the trendline, it could challenge higher resistance levels above $0.4900.

Source: TradingView

Conversely, failure to surpass this trendline could see FTM retesting support levels around $0.3840 and lower. The MACD’s current position slightly above the signal line and a neutral RSI provide a balanced view.

This suggests that while recovery is possible, significant bullish momentum is yet to be confirmed.

A sustained move above the trendline could signify the start of a recovery phase towards $1. On the flip side, if the trendline continues to act as resistance, FTM might experience further declines, testing lower support thresholds.

Impact of declining adoption rate

Despite the recovery sentiments on FTM, the new adoption rate decreased from a 30-day high of 30.64% to the press time rate of 22.49%.

This downtrend in adoption could be signaling a waning interest or slowdown in new user engagement with the FTM network.

A lower adoption rate often correlates with reduced buying pressure, which can lead to a stagnation or decrease in price.

As FTM shows recovery signs, the decline in adoption rate poses a threat to the rebound. This emphasizes the possible direct impact of reduced new user inflow on Sonic’s valuation.

Source: IntoTheBlock

If the trend continues and the adoption rate doesn’t see a reversal, it could hinder the potential recovery, possibly leading to lower prices.

Conversely, any increase in adoption rate might help stabilize or increase the price, reflecting renewed interest and investment in FTM.

Furthermore, S saw a steady decline in the number of transactions from a 7-day high of 530 transactions to a press time average of 436.71.

This decrease further signified waning user activity and could negatively impact FTM’s price if the trend continues, suggesting less network utilization.

Source: IntoTheBlock

If transaction activity stabilizes or increases, it could indicate renewed interest and support FTM’s price stability or growth.

Watching for any sudden increases in transaction volume is key to predict upcoming price movements.