As a seasoned researcher with years of experience navigating the ever-changing landscape of cryptocurrencies, I find myself intrigued by the recent price movements of BONK. The coin’s 1.6% plunge on Monday, while Bitcoin and other altcoins were generally trending upwards, is a stark reminder of the rollercoaster ride that is the meme crypto market.
On Monday, the price of BONK dropped by 1.6% to $0.000019, going against the overall upward trend in the broader crypto market. Although Bitcoin‘s efforts to reach $600,000 have boosted many major altcoins, the meme cryptocurrency sector continues to face difficulties. Is it possible that this weak momentum will extend the correction period further, or will buyers intervene to reverse this trend?
BONK Price Hits Multi-Month Support
Over the past month, the price of BONK coin has seen a significant drop in value due to strong selling pressure. This decline has caused the asset’s worth to fall from $0.000033 to $0.00001745, resulting in a loss of 48.5%. Currently, the decreasing price is testing the support trendline of an uptrend channel that has been active since February 2024.
From my perspective as a researcher, I find it intriguing how the chart pattern seems to encourage a gradual recuperation, mirroring the two ascending trendlines. It’s essential to note that the bottom of the pattern functions as significant support. However, if there were a hypothetical breakthrough below the lower trendline, it could potentially have a substantial influence on the overall recovery trajectory.
As reported by Coin Shares, there was a notable withdrawal of around $39 Million from the Layer 1 blockchain Solana. This substantial withdrawal seems to align with a dramatic drop in trading activity for meme coins, a sector where Solana has been progressively important. This decrease underscores the unpredictability and shifting sentiments among investors in the meme coin market, underlining the speculative character of these assets.
The price of BONK dipping below its daily moving averages (20, 50, 100, and 200) suggests that the easiest direction for the market is downward. Furthermore, a possible ‘death cross’ between the 50-day and 200-day moving averages may intensify the selling pressure.
Furthermore, data from Coinglass reveals that the BONK’s Open Interest (OI)-weighted Funding Rate stands at -0.0161, suggesting a high number of short positions. This negative rate signifies a predominant bearish sentiment among traders, as they are prepared to pay extra to maintain their short positions.
If this pattern continues, it might gradually undermine the trust investors have in BONK, possibly causing a steeper drop in its value.
Therefore, if the price drops below the lower support line and ends the day as a bearish candle, it will strengthen the hands of sellers, potentially leading to an extended decline. This post-breakdown drop could have lowered the asset’s value by 27%, taking it down to $0.000012.
In other words, when the ADX indicator rises significantly above 30%, it might indicate that the ongoing downtrend could be nearing its end, suggesting the asset might be excessively sold off. This situation frequently precedes a change in price direction, either towards a period of stability or a possible upturn.
If the foundation remains stable, there’s a possibility that the price of the meme coin built on Solana might surge by approximately 30%, reaching around 0.000023.
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2024-08-20 00:16