Over the past week, the meme coin BONK, which is based on Solana [SOL], has seen a remarkable 100% boost driven by an overall surge in the market and a significant deflationary strategy to burn 1 trillion tokens.
On November 15th, Bonk DAO unveiled its plan to burn tokens by Christmas 2024, sparking excitement among investors.
“The BONK DAO BURNmas SUPER thread. The Goal: Burn 1 Trillion $BONK by Christmas. The initiative involves burning BONK tokens based on specific engagement criteria.”
Following the announcement, BONK experienced a 27% surge immediately and continued to climb throughout the week, reaching gains of over 100%, with an additional boost over the weekend. Burning tokens reduces the supply, which in turn can drive up the value of the remaining tokens.
What’s on the Horizon for BONK?
The recent surge has propelled BONK into uncharted price territory. By utilizing a Fibonacci retracement tool (highlighted in yellow) between the previous all-time high (ATH) and the annual low, analysts can project potential future targets.
The latest uptick on Sunday set sights on the immediate bullish target of $0.000057 on the Fibonacci tool. Should the upward trend continue, the next target would be $0.000067, offering an additional 40% in potential gains.
However, sustaining these gains for BONK will hinge on the coin remaining above its previous ATH.
Technical indicators suggest significant buying interest despite signs of an overheated market. The Stochastic RSI indicates an oversold market, while the OBV (On Balance Volume) has hit new highs.
Reducing Exposure for BONK Whales
Market data reveals that major holders of BONK have slightly reduced their exposure following the recent surge, as reflected by the declining Whale vs. Retail Delta indicator.
A decreased exposure from whales often leads to consolidation or a price correction. Should this trend persist, BONK might experience a cooldown period or a pullback in its price.
Conversely, an increase in whale exposure typically signals the potential for a price rally.
Interestingly, leveraged bullish investors also jumped on the BONK bandwagon, increasing open interest rates threefold from around $50 million to over $150 million within days. This surge indicates that leveraged traders took on substantial debt to speculate bullish on BONK.
Industry experts anticipate that the BONK rally will continue, partly due to the upcoming 1 trillion token burn. However, the broader market sentiment will play a critical role in determining the memecoin’s future price trajectory.