Throughout the recent month, the digital asset Bonk [BONK] faced challenges, experiencing a decline of 25.29% without providing profits for investors. Nevertheless, there are indications of a potential recovery as the asset shows a slight increase of 0.16% within the last 24 hours.
CryptoCrypto has highlighted strong bullish signs that have propelled BONK’s recent modest upturn. Yet, uncertainties linger over the sustainability of BONK’s upward momentum due to conflicting trader sentiments, creating a probable hurdle.
A Dual Bullish Formation within the Accumulation Range
Currently, BONK is situated within two bullish formations: a larger descending channel and a consolidation phase residing within this channel, suggesting ongoing accumulation.
The descending channel usually signifies decreasing lows as buyers bid at progressively lower prices before a market upturn. Inside this structure, the consolidation phase, denoted by a rectangular box, illustrates price distribution between defined support and resistance levels.
A breakout from this consolidation phase and a breach of the descending channel’s resistance boundary could potentially propel BONK towards a substantial rally, with a target price of $0.00005666—a gain of 78.65% from its current position.
Technical indicators bolster this optimistic outlook. The Relative Strength Index (RSI), gauging price momentum, has rebounded precisely from the neutral line at 50 to settle at 53.89, indicating upward momentum.
When the RSI remains above 50 and trends upwards, as is the case with BONK, the probability of sustained price increases rises.
The Aroon indicator further validates the bullish momentum. Aroon-Up (orange) stands at 64.29%, surpassing Aroon-Down (blue) at 21.43%, pointing to robust buying activity and hinting at BONK’s continued accumulation phase.
The Aroon indicator monitors trend strength and direction by measuring the time since recent price highs and lows.
However, CryptoCrypto has noticed some market reluctance, with specific segments displaying signs of selling pressure.
Potential Setback in BONK’s Upward Surge
The memecoin might encounter a temporary halt or deceleration before resuming its upward trajectory.
Currently, Open Interest (OI) has reduced by 4.97% in the last 24 hours, dwindling to $12.15 million. A decline in OI commonly indicates a bearish sentiment, implying diminished trader involvement or position exits.
Additionally, Exchange Netflow data displays unfavorable trends for BONK, with a notable influx of funds into exchanges amounting to $7.85 million in the previous week.
This movement underscores amplified selling pressure as more market participants transfer assets to exchanges.
If these trends persist, BONK risks prolonging its consolidation phase before a breakout occurs. Yet, if buyers step in to accumulate the asset, the memecoin could potentially expedite its rally.
Expansion in TVL for BONK
The Total Value Locked (TVL) of Bonk Staked SOL (bonkSOL), a liquid staking token (LST) linked to BONK validators, has encountered a notable upsurge.
Currently, the TVL stands at $23.59 million, marking its peak since December 21st.
This significant influx of liquidity into the memecoin’s validator pool is anticipated to generate a favorable ripple effect on BONK itself.