As a seasoned crypto investor with battle-hardened eyes and a wallet that has seen more market cycles than I care to remember, I find myself standing at the precipice of another potential storm. The recent surge in BONK’s price is like a beacon amidst the chaos, but it doesn’t blind me to the underlying turmoil brewing beneath the surface.
On Tuesday, the BONK price experienced a 8% increase, signaling a temporary respite after a series of market downturns. This sudden spike was triggered by an upsurge in purchasing activity, which coincided with Bitcoin holding its ground above $50,000. Consequently, the overall crypto market value climbed by 8.7%, reaching approximately $1.95 trillion. Despite this, many prominent altcoins are yet to find their bottom due to lingering bearish sentiment and concerns about a possible recession among investors.
BONK Price Teeters at Major Support
Over the past three weeks, I’ve noticed a significant selling pressure on the BONK price, clearly indicated by a string of red candles on my daily chart analysis. This bearish trend culminated in a dramatic drop from $0.000035 to a low of $0.000015 on Monday, resulting in a substantial 54% loss for the asset.
Reflecting recent price reductions, the open interest for the BONK coin has significantly decreased since late July, as indicated by Coinglass. The OI data plummeted from $13 million to $5.7 million, representing a 55% decrease. This downward trend suggests a possible reduction in market fluidity and waning investor interest in BONK.
In my analysis today, I noticed that the BONK price dipped back to $0.0000196 amidst the market’s upward surge, indicating an attempt to maintain stability above the support trendline of its channel pattern. On a daily timeframe chart, it appears that this Solana-based meme coin has been on a steady recovery trajectory since February 2024, mirrored by two parallel trendlines, hinting at a potential continued uptrend.
In simpler terms, the data from the derivative market suggests that short sellers are actually having to pay to keep their positions open, because they believe the price will continue to fall. This negative funding rate was -0.028.
Moreover, the Average Directional Index (ADX) has risen significantly to 19%, suggesting a growing influence of sellers over buyers in the present market scenario.
Consequently, if there’s a drop below the current trendline, it could significantly increase the pressure to sell, potentially leading to a 28% decrease that would test the support at $0.000012.
Instead, if the BONK price can maintain itself above its downward trendline, there’s a chance that buyers might form a reversal pattern, contradicting the bearish argument. This could lead to a surge in the asset, potentially raising it by more than 30% to reach $0.0000266.
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2024-08-06 15:54