Investors holding Bonk [BONK] are still grappling with the ongoing market downtrend.
Over the last month, the token has experienced a significant decline of 56.44% and has continued to slide, shedding another 14.25% in the past 24 hours amidst a broader crypto market downturn.
A recent analysis by CryptoCrypto indicates that BONK may be on the verge of establishing a new all-time low, especially with the emergence of a bearish fractal pattern.
Impending 25% Decline as Support Wavers
BONK has broken out of its year-long consolidation range that initiated in December 2023. During a consolidation phase, prices move within defined support and resistance levels.
The breach has caused a breakdown below the current support level at 0.00001531, pushing the token towards an all-time low of 0.00000933 as of now, marking a 25.41% decline from its current price.
If this support level fails, the downward trend could intensify as the market enters a bearish phase with no significant support level to prompt a recovery.
Fractal Pattern Indicates Further Downside
The OI-Weighted Funding Rate, a metric combining Open Interest and funding rates to predict market direction, suggests a continuation of the decline.
With the metric consistently remaining negative lately, it indicates prevailing bearish sentiment.
Historical data shows that similar negative sentiments in the past led to substantial drops in BONK prices, entering oversold territory before modestly stabilizing and then falling further.
Currently, a comparable pattern is evolving, with the OI-Weighted Sentiment mostly bullish for two days alongside the RSI nearing overbought levels.
If history mirrors the present, BONK might stabilize briefly before resuming its downward trajectory.
The RSI, which identifies overbought and oversold conditions, suggests limited upside potential for BONK and a higher chance of further declines towards, or even below, its all-time low.
Driven by Selling Momentum
The current BONK decline is fueled by a sharp increase in trading volume, surging by 186.53% to $39.81 million, indicating strong sell-off momentum.
This spike in volume correlates with decreasing Open Interest, with numerous unsettled contracts being closed, exemplified by a 24-hour decline of 10.81% to $8.18 million.
Sustaining this trend would contribute to the ongoing bearish market sentiment, keeping BONK under pressure.