STONK enters correction phase after $0.35 ATH – Weekly gains cut to 12%
Decoding why StonkFun's rally had cooled off over the past four days.
StonkFun [STONK] is down 16% in the past 24 hours, reducing its weekly gains to only 12%. The daily trading volume has also declined to around $50 million from about $140 million.
Network activity primarily drove the launchpad token by increasing its revenue and sparking a supply crunch. Will the token recover with its price sitting at the 100 EMA support?
STONK price action in a correction phase
After hitting an all-time high (ATH) of $0.35, STONK entered a correction phase, trading in a descending trend channel. At the time of press, the token was trading 32% below $0.25, the last area of support.
Notably, this bull flag is a continuation pattern but only valid if the price can break above the slanting resistance. Moreover, it should hold above the 100 EMA level at $0.15.
Trading above the 100 EMA indicates the short-term price action is still bullish.
However, the Choppiness Index (CHOP) is at 45.25 and declining. This indicated the downtrend was becoming stronger even if the price was approaching a demand zone.
Therefore, if bulls return to buying STONK as before, the token could break above the trendline resistance, exposing a new peak. Otherwise, losing $0.15 puts lower levels like $0.10 or the initial demand zone at $0.02 into focus.
Why is StonkFun declining?
Apart from a price correction, the sharp decline in launchpad activity also contributed to this price action.
For instance, STONK‘s Futures volume declined from $544K to $366K, while Spot volume fell from $78K to $35K in a few hours. In fact, sellers dominated both Futures and Spot markets at 50.79% and 74.18%, respectively.
Even the DEX volume fell from $38.56 million to $21.62 million, a 44% decline in just four days. As a result, the weekly DEX volume has also plunged from $186 million to $164 million.
Therefore, the daily protocol fees stayed low, reducing from a high of $1.85 million to $588K. This was more than a 3x decrease in just a week, confirming StonkFun’s network activity was weakening.
Still, STONK is roughly one-tenth the market cap of PUMP while generating 21% more revenue over the last seven days. This hints that StonkFun could reclaim its early success by continuously crunching circulating supply through token burns from the revenue generated.
Final Summary
- StonkFun fell by more than 16% as STONK price action entered a correction phase after hitting a peak of $0.35.
- StonkFun’s decline in Spot and Futures volume, DEX volume, and fees amplified the pullback.
