Investor Confidence Cracks as SOMI Slides Below $0.50

Somnia (SOMI), the native token of the layer-1 blockchain platform Somnia, has experienced a dramatic reversal in fortunes following an initial surge to an all-time high. On September 7, SOMI reached $1.84, driven by a significant increase in trading volume and the platform’s technical milestone of processing 1 million transactions per second (TPS). However, within just 48 hours, the price of SOMI plummeted, retreating to around $1.60 and continuing to decline, with open interest dropping by more than 50% during the same period. This sharp correction has raised concerns among investors about the token’s short-term viability.

The initial price spike was attributed to a surge in trading volume, which escalated from below $120 million on September 4 to over $1 billion. This rapid increase in activity signaled heightened market interest and liquidity, which typically supports price momentum. The volume spike coincided with the launch of Somnia’s mainnet, a key development that positioned the blockchain as a leader in scalability and real-world adoption. Ormi Labs, one of the project’s key backers, publicly praised the milestone and committed to supporting the network’s infrastructure to sustain growth.

Despite the bullish momentum, technical indicators soon began to signal overbought conditions. The Bollinger Bands on the 4-hour chart showed that the price had touched the upper band, a common sign that a correction may be imminent. This was reinforced by a drop in the Bull Bear Power (BBP) indicator, which had previously fueled the price rally. As a result, traders and airdrop recipients began selling portions of their holdings, contributing to a pullback in the token’s value.

Further bearish signals emerged from the Relative Strength Index (RSI) and Chaikin Money Flow (CMF), both of which indicated weak buying pressure. The RSI moved below the neutral 50.0 level, entering bearish territory, while the CMF hovered near the zero line, reflecting subdued inflows and a lack of sustained investor participation. These technical indicators suggest that the market has not yet regained confidence in SOMI’s ability to maintain its valuation.

In the wake of the correction, the price of SOMI has fallen nearly 18% in a six-hour period, currently trading at $0.475. This decline has raised concerns that the token could slip below the $0.453 support level, potentially triggering further downward movement. Analysts have noted that unless buyers step in with greater conviction, the token may struggle to stabilize. However, some have suggested that a recovery above $0.492 could reignite bullish sentiment and provide the necessary momentum for a potential rebound toward $0.529.