SOMI - -40.27% in 24 Hours Amid Sharp Volatility

On SEP 27 2025, SOMI dropped by 40.27% within 24 hours to reach $0.8664. Over the past week, the asset experienced a dramatic decline of 751.07%, reversing much of the previous month’s gains. Despite the recent pullback, SOMI still remains significantly higher than a year ago, with a cumulative gain of 7609.85% year-to-date. The sharp drop has reignited interest in the token’s volatility patterns and potential for recovery in the near term.

Technical indicators suggest a complex market sentiment. The 50-day moving average currently sits above the 200-day line, indicating a potential long-term bullish bias. However, the recent price drop has pulled the 20-day moving average below the 50-day line, signaling short-term bearish momentum. The Relative Strength Index (RSI) has dropped into oversold territory at 28, hinting at potential for a near-term bounce. Analysts project that a retest of key support levels will be critical in determining the token’s immediate direction.

SOMI’s recent behavior underscores the importance of structured market analysis. With its sharp one-day drop and larger weekly losses, the token has become a subject of both caution and speculation among traders. Despite the recent downward trend, long-term holders appear to remain relatively optimistic, as the 30-day gain of 7609.85% reinforces the token’s historical performance. The discrepancy between short-term and long-term trends highlights the need for a disciplined approach when evaluating entry or exit points.

Backtest Hypothesis

A proposed backtesting strategy aims to simulate a trading approach based on SOMI’s current technical indicators. The strategy involves entering a long position when the 20-day moving average crosses above the 50-day moving average, and exiting when the RSI enters overbought territory (above 70). A short position is triggered when the 20-day moving average crosses below the 50-day line, with a stop-loss set at the most recent swing low. The approach incorporates a 5% risk management rule to limit potential losses during volatile swings like the recent 40.27% drop. If applied to historical data from the past 30 days, the strategy would have captured a significant portion of the gain while mitigating some of the recent losses. The effectiveness of the strategy remains to be validated through full backtesting.