BONK price recovery – Traders may be ‘buying the dip,’ but…

• BONK rebounded from critical support, showing strong fundamental demand
• Increased Open Interest and stabilization in liquidation levels suggested growing investor confidence

BONK surged by 7%, before dropping again, in the last 48 hours, driven by high trading volume as investors capitalized on the recent dip. BONK, at press time, was valued at $0.00002009 with a 24-hour trading volume of $470 million. This represented an 8.83% hike over the aforementioned period, despite a 19.55% decline over the past week. 

In fact, BONK seemed to have mirrored the market sentiment of other prominent cryptos during this period. 

Technical analysis: Indicators and support levels

BONK’s recent price action indicated a recovery from a critical support level. After falling below $0.00001815, BONK rebounded somewhat on the charts, suggesting strong fundamental demand despite recent declines. 

Meanwhile, the Aroon indicator revealed mixed signals, with the Aroon Up (blue) at 85.71%, indicating strong upward momentum. On the contrary, the Aroon Down (orange) was at 21.43% – A sign of diminishing downward pressure. 

In fact, this divergence hinted at a possible trend reversal, though consistent upward movement in the Aroon Up is essential to confirm a sustained uptrend.

Source: TradingView

At press time, the Relative Strength Index (RSI) stood at 41.11, recovering from oversold conditions but remaining below the neutral 50 level. This suggested that while immediate selling pressure has eased, the market hasn’t yet entered a fully bullish phase. 

The Awesome Oscillator (AO) remained negative, but the histogram bars were showing signs of decreasing bearish momentum.

A positive turn in these bars would further validate a bullish reversal.

Price targets and potential gains

BONK’s price recently dipped to around $0.00001815, before rebounding to its press time level of $0.00002103. This price action was crucial as it reclaimed the previous support level, indicating potential for a further uptrend if the buying pressure sustains itself. 

Should BONK hold the support level at $0.00002061 and rise to the first resistance at $0.00003391, it would represent a potential increase of approximately 64.56%.

If it reaches the second resistance level at $0.00004440, the potential gains could be substantial too. 

Source: TradingView

According to Coinglass, Open Interest for BONK rose by 11.22%, reaching $7.16 million. This hike in open interest can be interpreted as a sign of growing investor confidence in the potential for further price hikes.

Liquidation trends and market sentiment

Notably, there was a significant spike in short liquidations around early March, exceeding $4 million, accompanied by a sharp decline in BONK’s price. 

Of late, liquidation levels stabilized, with balanced activity between long and short positions and minor price fluctuations. This may alluding to a period of consolidation, one where neither buyers nor sellers have a dominant advantage.

In fact, according to a recent analysis by AMBCrypto, BONK formed a symmetrical triangle pattern, indicating a period of consolidation that typically precedes a breakout. 

It’s worth pointing out though that at the time of writing, the memecoin seemed to have reversed some of its recent losses on the charts. Even so, the technical indicators remained strong enough to suggest that this might be temporary.