During the current phase of price adjustment, BONK, the renowned memecoin built on the Solana network, has breached a critical support level. However, some suggest that this decline might not be as authentic as it appears. This interpretation is influenced by the overall sentiment of traders and their positions favoring an upward movement.
Technical Evaluation and Key Levels of BONK
An examination of the memecoin’s charts indicates that BONK has broken through a significant support level at $0.0000196 and concluded a daily candle below it. The candle closure below this level partially validates the possibility of a substantial decline in the asset’s value in the near future.
If the current decline continues, there is a likelihood of BONK experiencing a 20% decrease, reaching the $0.0000155 mark in the upcoming days. Presently, the memecoin is trading below the 200 Exponential Moving Average (EMA) on the daily timeframe, signaling a downward trend.
Nevertheless, the bearish scenario for BONK will only remain valid if it stays below the $0.000020 threshold; otherwise, it might not materialize.
Positive On-Chain Indicators
Despite the pessimistic signals on the charts, on-chain metrics for BONK show a positive sentiment prevailing among traders.
Notably, according to data from CoinGlass, the long/short ratio for BONK currently stands at 1.42, the highest level recorded since October 2024.
This ratio reflects a strong bullish sentiment among traders, with around 60% of prominent traders having long positions and 40% holding short positions at present.
BONK’s Open Interest has declined by 6.2% over the last 24 hours, signaling a diminished interest from traders. This decrease suggests that traders have been closing out positions in response to the recent drop in the altcoin’s value.
Significant Liquidation Thresholds
It is important to note that major liquidation points are identified at $0.0000189 on the lower end and $0.00001962 on the upper end. These are levels where traders are excessively leveraged, as per data from Coinglass.
In a pessimistic market scenario where the price dips to $0.0000189, long positions worth nearly $100,000 could get liquidated. Conversely, if the sentiment changes and the price rises to $0.00001962, short positions valued at about $71,100 might face liquidation.
When considered together, these on-chain metrics reveal that despite a significant breach of the support level, bullish sentiment continues to dominate BONK memecoin. While trader sentiment can shift rapidly, the prevailing sentiment at the moment appears to be leaning towards the bullish side.