- BONK broke out a massive falling wedge pattern that had contained the price since the end of December 2024
- Cumulatively, more shorts have been forming than longs, with the highest cumulative short liquidation leverage at the $.0.00002100
BONK is in the news now after its price action broke out of a significant falling wedge pattern, one which spanned from late December 2024. This hinted at a potential transition to a new market direction on the charts.
BONK price action and prediction
A deep analysis revealed that BONK saw a major breakout from its consolidated range, one that has failed various times previously. This ultimately sent its price to $0.00002011, at press time.
To validate the breakout, BONK would need to stay above the $0.00002000-zone while the pattern’s upper bound remains as its support. The initial barrier to a greater uptrend lay at $0.00003 and the main target resided near $0.00006193, corresponding with Q4 2024’s peak.
For the MACD indicator, it highlighted powerful bullish signals as its line stood at $0.00000121 above the 0.00000082 Signal line, while displaying an uptrend on the histogram.
Source: TradingView
This implied that buyers could maintain dominance while more gains are accrued, provided traders showed enough buying power. However, BONK could probably revisit its prior wedge resistance near $0.00001500. Especially if the price does not sustain any stability above $0.00002000.
A failure to maintain $0.00002000 as support would call into question the validity of BONK’s breakout structure. This might send the price falling towards the $0.00001000 area.
A series of BONK price closes above $0.00002000 could spur confidence for an additional price hike. If rejection happens, bulls would need to protect lower support areas against another extended bear market.
Rising leveraged positions, volume, and OI
Additionally, more traders have been accumulating short positions as BONK was valued at $0.00002014. The most stacked short leverage totaled the $0.00002100 region which was slightly higher than the market price, while exceeding $5 million short contracts.
The activity of long traders during price dips has remained conservative though. This, due to their cumulative liquidation leverage hitting the $0.00001900–$0.00001960 zone, relatively low compared to shorts contracts.
A price hike above $0.00002100 may trigger a wave of short liquidations. This would accelerate market ascent up to $0.00002200.
Source: Coinglass
The early long positions would likely fail and the price would see a hike in pressure. Especially if BONK falls below $0.00001900, triggering additional market withdrawals.
The excessive short positions suggested that while traders may have expected a drop, crossing resistance could trigger a strong short squeeze. BONK’s next move depends on volatility, as both longs and shorts have built up strong opposing positions.
Source: Coinglass
Meanwhile, BONK at $0.021 had Open Interest (OI) at $267.61M and volume at $659.60M. While the OI has built up from its mid-April levels of around $150M, the volume has remained consistently low.
Such a divergence could be a reflection of speculative positioning not exactly based on a lot of conviction. This could help induce volatility if the price makes any meaningful moves either way.
