Key Takeaways
A confluence of factors meant that even though BONK exhibited bearish momentum, it could see a bullish trend reversal soon. The one factor not in favor of the bulls was the buying volume in recent weeks.
Bonk [BONK], at the time of writing, was trading at a zone of support that launched its rally to $0.00004 in July. In fact, the memecoin has retraced by 44% since hitting those highs last month.
The bearish short-term Bitcoin [BTC] bias suggested that BONK traders should be wary of further losses.
Bitcoin‘s Dominance has been dropping in recent weeks. At press time, it was below a zone of support (cyan) from September 2020. A sustained downtrend in the BTC.D would be good for the altcoin market, including the memecoin sector.
This implied that the altcoin market cap may be expanding faster than Bitcoin’s – A sign of capital flow into altcoins. The memecoin market cap has been slowly growing since March. With a value of $71.41 billion though, it’s still a sizeable distance from the $115-billion mark it reached in late 2024.
What should you expect from BONK next?
Source: BONK/USDT on TradingView
On the 1-day chart, the internal structure was bearish. The previous swing points were marked in white, and BONK made a new lower low in August. Hence, the bias for the coming days appeared bearish. The Awesome Oscillator was moving below the zero line, underlining the bearish momentum in the market.
However, the memecoin was trading at a bullish breaker block from May. The $0.0000225-area had served as resistance during July’s rally. This meant that a retest could find support here.
The Fibonacci retracement levels plotted showed that the 61.8% level was at $0.000226. The 100-day moving average was also within this zone. This combination of factors meant that BONK was trading at a key long-term support zone.
Traders and investors should be alert for a bullish reversal. One concern might be the decline in trading volume over recent days though, something that was also reflected in the A/D indicator. This needs to change for BONK to establish an uptrend.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
