The value of the popular memecoin project Bonk, part of the Solana ecosystem, witnessed a significant decline last week. As of now, BONK trades at $0.000021, marking a 24% drop over the past seven days. This fall has pushed BONK to hit the critical support level within the descending triangle pattern it has been moving in since May. Key technical signals suggest a possible further decline below this level.
Why is BONK Dropping?
BONK’s daily chart shows the altcoin has been trading within a descending channel since May 29, resulting in a 42% drop in value. This pattern, characterized by a series of lower highs and a horizontal support level, typically signals a continuation of the downtrend if the price falls below the support level. Currently, BONK is at this support level, trading at $0.000021.
Technical indicators reinforce the potential of this downtrend continuation. For instance, the Relative Strength Index (RSI) for BONK stands at 36.35, indicating significant selling pressure. This downtrend in RSI reflects that more market participants are selling their assets rather than buying new tokens, which further pushes the altcoin’s price downward.
Is BONK’s Bearish Trend Confirmed?
The Moving Average Convergence Divergence (MACD) indicator also points towards a bearish trend for BONK. The MACD line is currently below both the signal and zero lines, suggesting weakening price momentum and a likely continuation of the downtrend. Crossing below the zero line further solidifies the bearish outlook as the short-term moving average dips below the long-term one.
Investor Takeaways
– Investors might consider exiting long positions and taking short positions in the futures market.
– If the support level cannot be defended, BONK’s price could plummet to $0.000012, a level last seen in April.
– A shift in market sentiment from negative to positive, coupled with increased accumulation, could push BONK’s price to $0.000025.
In conclusion, BONK’s current technical indicators suggest a bearish outlook with potential further declines. Investors should keep a close eye on key support levels and market sentiment to navigate this volatility effectively.