- BONK’s Open Interest has fallen to its lowest point in the last 10 days.
- Key indicators hinted at a bullish divergence, but negative sentiment remained.
The Futures Open Interest of the dog-themed Solana [SOL]-based meme coin Bonk [BONK] has plummeted to its lowest level in 10 days, data from Coinglass has shown.
According to the data provider, the Open Interest began to decline on the 10th of January and has since fallen by 33%. At press time, BONK’s Futures Open Interest stood at $2.97 million.
Source: Coinglass
A decline of this nature in an asset’s Open Interest suggests a fall in trading activity due to low interest, a shift in sentiment, and increased profit-taking.
BONK’s price peaked at $0.000024 on the 15th of December 2023 after witnessing a 2900% surge in the preceding month. But since then, BONK’s value plunged as traders intensified profit-taking efforts.
According to data from CoinMarketCap, BONK’s price has dipped by 42% in the last month.
Source: CoinMarketCap
AMBCrypto found that BONK’s market has been predominantly marked by negative Weighted Sentiment so far this year.
As traders’ sentiment becomes even more bearish, there will be a corresponding hike in the number of trading positions being closed, thus causing a further decline in the meme coin’s price.
Source: Santiment
Also, as investors exited their BONK trading positions in the last ten days, its price dwindled. Exchanging hands at $0.0000118 at press time, BONK’s price has fallen by 18% in the last seven days.
Much ado about nothing?
However, AMBCrypto’s assessment of BONK’s price movements on a daily chart revealed that despite its price decline in the last week, the values of some key indicators have climbed, creating a bullish divergence.
While BONK’s fell, its Chaikin Money Flow (CMF) climbed to be pegged above the zero line at 0.18 at press time. Similarly, the token’s Money Flow Index (MFI) was spotted in the overbought zone, returning a value of 82.32 at press time.
Source: TradingView
Often, when an asset’s price craters while its CMF and MFI climb, it signals a potential trend reversal. This suggests that strong buying pressure may build up, which could eventually push the price and break the downtrend.
However, an attempt to confirm this by observing BONK’s Moving average convergence/divergence (MACD) indicator showed that the market remained significantly within a bear cycle. Its MACD line, at press time, returned a negative value.
How much are 1,10,100 BONKs worth today?
Therefore, the rise in CMF and MFI may be due to the activity of a small group of aggressive buyers trying to initiate an uptrend, despite weak overall market demand.
With market sentiment predominantly bearish as of this writing, further price declines may occur.
