Sonic token has crashed into a bear market even as its decentralized finance ecosystem surges to a record high.
Sonic (S) price was trading at 50 cents on Saturday, down by about 50% from its all-time high. This drop has led to a big drop in its market cap from $2.8 billion in February to 1.48 billion.
Sonic’s crash occurred even as its DeFi ecosystem continued to do well. DeFi Llama shows that the total value locked in its ecosystem jumped to a record high of $860 million this week. The TVL jumped to 1.7 billion in Sonic terms.
Notably, unlike other chains, this Sonic growth is being driven by numerous decentralized applications. Silo Finance has $202 million in assets, while AAVE V3 has accumulated over $184 million a month after launch.
Avalon Labs, Shadow Exchange, and SwapX are the other top players in the Sonic ecosystem, while Beets and Veda are the largest liquid staking platforms.
This growth could continue in the coming months as more dApps continue deploying on the network. A likely reason for this is that all deployers are earning about 90% of all the network fees generated by their applications.
Sonic’s growth could accelerate in the coming weeks. Circle, the company behind USD Coin (USDC) has hinted that it will deploy its stablecoin into the network. That move will likely boost the amount of stablecoins on the network from the current $255 million.
Sonic also recently debuted its virtual and physical card, which lets users pay with the S coin. According to the website, this card is accepted by over 130 million merchants worldwide.
These developments took place less than three months after the network rebranded. Previously known as Fantom, the rebranding introduced new features like increased transaction speed and throughput, smart contract execution, and lower costs.
Sonic price analysis
While Sonic has strong fundamentals, technicals suggest that it may soon have a breakdown. The token has formed a rising wedge pattern, which is characterized by rising and converging trendlines. This pattern often leads to a strong breakdown.
Sonic token has also formed a head and shoulders pattern whose neckline is at $0.3795.
Therefore, there is a risk that the price will drop in the coming days. If this happens, it will likely drop to the key support at $0.3795, down by 25% from the current level.
