Bonk (BONK) fell 30% this week after profit-taking following its all-time high of $0.000062. While the decline is significant, certain levels may indicate a potential recovery. Traders are closely watching if the bulls can regain momentum. Here are the things to watch in the coming days.
The pullback and key support level of BONK
The price pullback of BONK stopped before reaching the -61.8% Fibonacci level. Although this level is not critical, the pullback has caused a price imbalance. Two key price areas could provide strong support for the bulls. The first imbalance is above the 23.60% Fibonacci level.
The second is the 50% Fibonacci retracement level, which aligns with the 50-day simple moving average (SMA). If the price falls below $0.000039, this 50% level could become a strong support. If bullish momentum returns, these levels could be key re-entry points. However, if short sellers continue to take profits, the recovery may be delayed.
The decrease in demand and whale activity may slow down the rebound.
At the beginning of November, rising demand in the spot market drove the rally, with a significant increase in cumulative volume delta (CVD) as evidence. However, now, both spot and futures market demand have decreased. Open interest (OI) and CVD are both declining, indicating weak demand.
This may make a quick recovery more difficult. Another bearish signal is the activity of Binance whales. Since mid-November, whales have been reducing their long positions. This shift is reflected in the increase of whales compared to retail investors, indicating that large participants in the market have decreased.
When whales retreat, price movements typically slow down or consolidate. For a price reversal, traders should focus on key support levels and whale activity. If whales re-enter the market, it could indicate a bullish comeback. If not, prices may remain subdued in the short term.