Sonic’s rebound lacks volume; bearish structure not yet broken

Sonic has bounced hard from fresh yearly lows, but bearish market structure remains intact. For a true reversal, price must hold above $0.24 and reclaim $0.40 with volume-backed strength.

Sonic (SONIC) recently dropped to a new yearly low near $0.24 before staging an impulsive rebound. The move has sparked speculation: is this a major bottom or just another short-lived bounce in a bearish market?

While the sharp rally into the value area low shows some signs of life, the broader structure remains tilted bearish. For this rally to evolve into a longer-term reversal, key levels must be reclaimed, and volume must confirm the intent.

Key technical points

• Yearly Low: $0.24; must hold to form a higher low and base for reversal.
• Critical Resistance: $0.40; reclaiming this level would break bearish market structure.
• Current Structure: Still bearish; lower lows and lower highs remain intact.
• Volume Profile: Still weak; strong volume needed to validate any breakout.

Sonic’s drop to $0.24 marked a key inflection point, a new yearly low that could represent a final flush if the level holds. The recent rally into the value area low is technically significant, but so far, it lacks the volume and structure needed to confirm a sustained trend shift.

For Sonic to build a convincing bottom, it must hold above $0.24 and begin forming higher lows on lower timeframes. A clean reclaim of $0.40 would be the first meaningful sign of structural change, breaking the series of lower highs that have defined the current downtrend.

Volume remains a concern. While the bounce was impulsive, it appears driven more by a short squeeze than by genuine accumulation. The market had been heavily skewed to the downside, and Sonic’s sharp rise likely forced a flush of short positions. This type of move, while aggressive, doesn’t inherently signal trend reversal unless followed by sustained buying interest and structural improvement.

If Sonic consolidates above $0.24 and begins printing higher lows with increasing volume, the case for a mid- to long-term reversal strengthens. Until then, traders should be cautious in interpreting this move as anything more than a technical relief bounce.

What to expect in the coming price action

The next few weeks will be critical for Sonic. Holding above $0.24 is essential to form a base. If price consolidates and reclaims $0.40 with rising volume, it could signal the start of a broader trend reversal. Otherwise, bearish pressure may resume.