BONK hits the brakes on its rally – What next?
- BONK has a bearish market structure on the 12-hour chart.
- The sentiment behind the meme coin also leaned bearishly.
Bonk [BONK] posted strong gains during the past week, gaining 92% from 8th January to 10th January. Despite the remarkable rally, the higher timeframe price chart showed that BONK had a bearish outlook.
At press time, BONK bulls fought to defend a level of support at $0.000013. A drop below this level would likely see prices slide another 25%-30% lower.
Understanding the bearish bias of BONK
On the 12-hour chart, BONK posted a bearish order block at $0.000016. This zone was highlighted by the red box, and has been in play since 29 December. On 10th and 11th January, BONK bulls briefly pushed prices above this area.
However, they couldn’t establish an H12 trading session close above it. Moreover, the bears were able to drive prices lower once more, signifying seller dominance. The RSI was at 48 at press time and gave an early signal that momentum has flipped bearishly.
Despite these bearish observations, the OBV has stayed above the December pump’s high. This level has acted as a support over the past few days. This suggested that the selling volume has not been overwhelming, and underlined that the bulls have some hope.
The market sentiment of BONK was negative
AMBCrypto looked at some social metrics from Santiment to better understand where BONK stood. The social volume has been trending downward over the past month.
The weighted sentiment behind the meme coin was also consistently negative during its downtrend.
The rally of nearly 100% saw a huge jump in the Open Interest. This meant speculators were drawn to bet on their short-term bullish conviction on the token.
But after the rejection at the bearish order block, the OI has fallen alongside the prices.
Is your portfolio green? Check the BONK Profit Calculator
This indicated bearish market sentiment and discouraged longs. Investors and swing traders can wait for the $0.000016 area to be flipped to support before looking for buying opportunities.
Alternatively, a revisit to the $0.00000925 level could also yield a sizeable bounce.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.