Sonic’s price continued its recent upward trajectory as the majority of cryptocurrencies experienced a rebound, and its Decentralized Finance ecosystem witnessed significant growth.
Sonic (S), previously called Fantom, reached a peak of $0.6072 on Monday, marking its highest value since March 3.
In a post on X, a well-known crypto analyst shared two primary reasons why the current Sonic rally may have further potential.
Firstly, he pointed out that Sonic is considerably undervalued compared to other layer-1 cryptocurrencies, particularly Solana. He highlighted that Solana (SOL) has a market cap-to-DeFi TVL multiple of 12, while Sonic’s stands at just 2. Therefore, if Sonic manages to catch up to Solana, this could represent a 5 to 10 times increase from its current price.
Secondly, although Sonic’s ecosystem has expanded, the analyst believes there is still significant room for growth. Since the rebranding from Fantom, it has attracted over $854 million in DeFi TVL within a span of less than three months.
The number of developers on Sonic is increasing, driven by its low transaction costs and faster processing speeds. Notably, Sonic employs a fee monetization model that allows 90% of the network’s gas fees to be redistributed to developers. Approximately 70 developers have collectively earned over $418,000 since its launch.
This approach is likely to draw even more developers to the ecosystem. Recently, AAVE (AAVE), the second-largest DeFi network, transitioned to this platform and has already secured over $250 million in assets.
Short-term Analysis of Sonic’s Price
The four-hour chart indicates that the Sonic token has surged from $0.4055 on March 11 to $0.60. It has surpassed the crucial resistance level at $0.5610, where it had previously formed a double-top pattern on March 15 and 20.
Sonic’s price has climbed above the 50-period moving average and is also trading above the ascending trendline that connects the lowest swings since March 11. This trendline formed the diagonal of the ascending triangle pattern.
The token has broken above the 61.8% Fibonacci Retracement level and the Ichimoku cloud indicator. Consequently, it’s likely that the price will continue to ascend as bulls aim for this month’s high of $0.7891, which is roughly 30% higher than the current price. A breakthrough beyond this level will indicate further potential gains, with targets extending to $1, representing a 60% increase from the present level.