The popular altcoin BONK has seen a significant price drop since its all-time high on December 15, 2023. Despite the decline, BONK has recently broken out from a short-term descending resistance trend line.
Technical analysis on a daily timeframe indicates a rapid price increase for BONK since October, leading to a peak of $0.0000350 on December 15—a 20,000% increase in two months. The price has since fallen, reaching as low as $0.0000093. Analysts often use Elliott Wave Theory to identify long-term price patterns and investor psychology, which helps in predicting the direction of a trend.
Wave counting by analysts suggests that BONK has completed a five-wave rise from its lowest levels in October. The Relative Strength Index (RSI), a momentum indicator, is used by investors to determine if a market is overbought or oversold, and whether an asset should be accumulated or sold. An RSI value above 50 with an upward trend suggests bulls are in control, while a reading below 50 indicates the opposite.
The daily RSI shows a downtrend near its peak, supporting the wave count. Crypto analyst Trading_Axe criticized the community for not taking profits during a $12 million increase in BONK’s trading volume.
However, technical analysis on a six-hour timeframe suggests a relief rally might be expected, possibly due to EW count and RSI readings. Price action indicates a breakout from the descending resistance trend line following an uptrend in the six-hour RSI. If the analysis holds, BONK could surge up to 80% to the resistance levels created by the 0.5-0.618 Fibonacci retracement levels, between $0.0000220 and $0.0000250.