Bonk saw a 5.55% rally in the past 24 hours, but CoinMarketCap data showed that its daily trading volume has fallen by nearly 10% at the time of writing.
These gains could be driven partly due to the Solana [SOL] launchpad Bonk.fun news that 51% of the fees would be used to buy back BONK, up from the existing 10%.
BONK sinks below long-term support
Source: BONK/USDT on TradingView
Bonk’s [BONK] weekly chart showed a strong downtrend in progress. The $0.0000096 support, which stretched back to early 2024, was being retested as resistance.
Two weeks ago, a weekly trading session closed below this support.
The OBV was also in a downtrend with the price, and the RSI’s reading of 36 showed strong bearish momentum. Overall, it was a place where the bulls needed to make a last stand.
As things stand, the buyers lack the conviction to reverse the trend.
Source: BONK/USDT on TradingView
On the 4-hour chart, there seemed to be a bit of hope for BONK bulls. A range formation (purple) between $0.00000846 and $0.0000105 has halted the downtrend over the past three weeks.
At the same time, the OBV trended higher, while the RSI oscillated between bullish and bearish momentum. It was a sign that there was buying pressure in recent days.
Despite this hopeful development, it would be extremely difficult for the bulls to overturn the long-term downtrend.
The loss of $0.0000096 as support, just below the psychological $0.00001 level, was a big blow to bullish sentiment.
The bullish BONK case
The rising OBV hinted at a potential, albeit unlikely, BONK trend reversal. A breakout past $0.0000105 and a retest of the range high as support would be a buy signal.
To the north, the next target would be $0.0000135.
Traders call to action — Respect the range
The more likely scenario is a rejection at the range highs. Additionally, a range formation meant that traders should utilize the range extremes to take profits and position themselves for a revisit of the opposing range extreme.
Hence, a retest of $0.0000105 would offer a selling opportunity. Traders shouldn’t bet on a breakout before it has occurred.
Even if one materializes, the wider market sentiment and Bitcoin [BTC] bullish strength must be assessed to see if further BONK gains are possible.
Final Thoughts
- The three-week range formation offered clear entries and exits for traders.
- Despite the slow increase in OBV on the H4 chart, traders should trade the range until it is clearly broken.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
