Bonk [BONK] has successfully defended a critical support level throughout October, indicating a strong possibility of an upward movement for this meme-based cryptocurrency.
Following a robust recovery in September, resulting in gains of almost 65%, BONK experienced a slight retreat in the early part of October.
However, this retracement managed to hold above $0.000022, a significant support level seen in the second and third quarters of the year (highlighted in white). Could there be an opportunity for bullish investors to capitalize on additional profits in the short run?
Potential 25% Gain for BONK
Upon analyzing the daily charts, the immediate bullish target seems to be around $0.000028. With the consistent defense of the previous support level at $0.000022, BONK may target this near-term objective.
If successful, a gain of 25% could be achieved, providing an attractive risk-reward ratio of 2.4.
In the event of a further rally towards the subsequent target of $0.000034, a potential increase of 54% could be within reach. Technical indicators on the chart corroborated the optimistic outlook.
Notably, the stochastic RSI displayed a reversal from oversold territory, while the RSI remained above the neutral zone. This indicated a brewing bullish reversal, with strong demand likely to support an upward trajectory.
However, a dip below the $0.000022 support level would nullify the bullish scenario, potentially leading BONK down to $0.000015.
Smart Traders Bullish on BONK
Smart traders active on the Binance exchange exhibited a bullish bias towards BONK, reflecting high expectations for an upward price movement.
Based on the Top Trader Long/Short ratio, which tracks the sentiment of sophisticated traders on the platform, a significant 68% of positions were optimistic about BONK’s future growth. This overwhelmingly positive sentiment in the futures market hinted at potential gains.
Moreover, the liquidation heatmap identified $0.000022 as a critical liquidity zone with a substantial accumulation of leveraged long positions.
This positioning further solidified the level as a crucial support area, potentially serving as a retracement point before a subsequent surge.
Therefore, the risk-reward profile for BONK remained favorable, particularly for long positions as long as the cryptocurrency held above $0.000022. Nonetheless, a breach below this level would negate the bullish outlook.
Disclaimer: The content provided is not to be construed as financial guidance, investment advice, trading recommendations, or any other form of professional counsel, and represents solely the author’s perspective.