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Sonic Token has entered a bear market despite its decentralized finance (DeFi) ecosystem reaching a record high in total value locked (TVL).

Sonic Token Price Performance

Sonic, previously known as Fantom (FTM), is trading at $0.50 as of Saturday, representing a nearly 50% drop from its all-time high. This decline has significantly impacted its market capitalization, which fell from $2.8 billion in February to approximately $1.48 billion.

DeFi Ecosystem Growth

Interestingly, Sonic’s price drop contrasts with the strong performance of its DeFi ecosystem. Recent data shows that the TVL in Sonic-based applications surged to a record $860 million this week, equivalent to 1.7 billion Sonic tokens.

Unlike other blockchain networks, Sonic’s growth is fueled by a wide range of decentralized applications (dApps). Notable contributors include:

  • Silo Finance: $202 million in locked assets.
  • AAVE V3: Over $184 million in TVL within just a month of its launch.
  • Other prominent dApps such as Avalon Labs, Shadow Exchange, and SwapX.
  • Liquid staking platforms like Beets and Veda are among the largest in the ecosystem.

This growth trend could continue as more dApps deploy on Sonic, incentivized by its unique fee distribution model. Developers earn 90% of all network fees generated by their applications, directly rewarding them for user activity.

“60+ apps now participate in FeeM, earning 90% of the network fees generated by their apps. This directly rewards developers for user activity.” – Sonic Eco

Upcoming Developments

Sonic’s expansion may accelerate further with upcoming projects. Circle, the company behind USD Coin (USDC), has indicated plans to deploy its stablecoin on the Sonic network. This move could increase the volume of stablecoins on Sonic, currently valued at $255 million.

Additionally, Sonic recently launched a virtual and physical payment card, enabling users to make payments using the Sonic token. This card is reportedly accepted by over 130 million merchants worldwide, marking a significant step toward mainstream adoption.

Impact of Rebranding

These advancements come shortly after Sonic’s rebranding from Fantom. The rebranding introduced new features, including faster transaction speeds, improved smart contract execution, increased throughput, and reduced operational costs.

Sonic Token Price Analysis

While Sonic has shown strong fundamental growth, technical analysis suggests potential risks for its price trajectory. The token has formed a rising wedge pattern, characterized by converging upward trendlines, which often precedes a price breakdown.

Additionally, a head-and-shoulders pattern has emerged, with its neckline positioned at $0.3795. Should this bearish pattern play out, the price could drop by approximately 25% to test this key support level.

Despite these technical risks, Sonic’s robust ecosystem and upcoming developments may provide long-term support for its value.

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