During the previous week, memecoins were the biggest losers as attention shifted to large and mid-cap alternative coins in the midst of renewed calls for an altcoin season. Leading the pack of top losers was Bonk [BONK], which saw heightened profit-taking after reaching a record high of $0.000062.
At present, BONK has decreased by 29% from its recent all-time peak. While this might indicate a broader trend of capital movement, there are key levels that bullish investors should monitor.
Assessing BONK’s Decline
Despite falling just short of hitting the extended golden Fibonacci ratio (approximately -61.8%) at the new ATH, this level could still be considered as a potential bullish target in case of an upward movement following the pullback.
However, the upward trend has created significant price imbalances at two areas marked as white zones (fair value gaps FVG). The first immediate imbalance level is located above the 23.60% Fib, while the second is at the 50% Fib level.
The latter coincides with the 50-day SMA (Simple Moving Average), indicating it may serve as stronger support if the drop continues below $0.000039. Therefore, these levels could be crucial re-entry points for bullish investors if the positive momentum persists.
With the Stochastic RSI showing elevated levels and remaining oversold, there is a possibility of further pullback if short sellers continue to take profits.
Decline in Demand
Throughout the first half of November, a surge in spot market demand (evidenced by an increase in spot Cumulative Volume Delta—CVD) fueled the rally, which was later mirrored in the Futures market with a rise in Open Interest.
However, the demand in both Futures and spot markets has dwindled, evident by the downward trajectory of OI and spot CVD.
This could potentially hinder a strong recovery unless the meme coin narrative regains dominance in the market.
Another negative sign is the de-risking behavior exhibited by whales. Notably, whales on the Binance exchange have been steadily closing out long positions since mid-November, as reflected by the negative readings on Whale vs. Retail Delta.
Historically, decreased activity by major players has often led to subdued prices or consolidation, indicating a potential short-term impact on BONK.
To anticipate a potential price reversal, traders should keep an eye on critical levels and potential re-entry moves by whales, which could signify a probable recovery for BONK.