Bonk (BONK), the second-highest market cap token among Solana’s memecoins, has reached $1 billion in trading volume today. This milestone comes after BONK’s price rose by approximately 70% over the past seven days.

While many traders may hope that the increase in BONK volume is a bullish sign, this on-chain analysis suggests that may not be the case.

Bonk interest rises, but bullish sentiment declines

Data shows that Bonk's trading volume was about $125 million on November 9. Trading volume is a key metric for cryptocurrencies, reflecting the popularity of tokens and hinting at potential price movements.

High trading volume usually indicates increased interest. On the other hand, low trading volume indicates decreased interest. Therefore, BONK trading volume rising to $1 billion means increased interest in the meme coin.

From a price perspective, rising trading volume may be a positive, but only if the value of the cryptocurrency also rises. However, in the past 24 hours, BONK's price has experienced a period of consolidation and then began to surge at noon today, currently around $0.0000318.

In addition to trading volume, weighted sentiment is another indicator that suggests BONK may have difficulty continuing to appreciate.

The weighted sentiment index adjusts the value by taking into account the number of mentions, normalizing the data to make sentiment more comparable across assets. This means that when there is a high volume of mentions for a particular coin, the indicator will have peaks or valleys.

For the Solana meme coin, market sentiment has turned negative, indicating that most comments about the cryptocurrency are bearish. If this trend continues, demand could weaken, which could lead to price consolidation or declines.

Analyzing BONK’s derivatives data

Derivatives markets have mixed feelings about BONK. As of press time, the meme coin’s trading volume has surged another 15.5% to $1.06 billion, indicating that futures traders are increasingly optimistic about BONK’s future performance.

However, the decline in open interest shows that BONK’s open positions are decreasing. This suggests that futures traders are taking a cautious approach due to the volatile price action.

The long/short ratio is 1.53, which suggests that short positions outnumber long positions. The bullish bias in short positions could be due to the influx of long liquidations, on the contrary, short liquidations amounted to $231,500 in 24 hours.

The derivatives market is a good indicator of the bullish or bearish sentiment in the market. Therefore, the mixed data shows that there is uncertainty about the continued upward trend of the coin.

However, positive sentiment around Solana-based meme coins could support the uptrend. The total market capitalization of these meme coins rose more than 20% to more than $15.87 billion in the past 24 hours, according to CoinGecko.

Is BONK about to experience a brief dip?

On the daily chart, Bonk’s price continues to show signs of moving higher. This is also supported by the rising Money Flow Index (MFI) reading.

The MFI is an indicator that measures buying and selling pressure by analyzing price and volume data. It ranges from 0 to 100, with an MFI above 80 indicating overbought conditions, suggesting a potential sell opportunity, and an MFI below 20 indicating oversold conditions, suggesting a potential buy opportunity.

With a reading above 80, BONK could soon become overbought. If this is the case, then the value of the meme coin could drop to $0.000026. However, if Bonk’s trading volume continues to rise and BONK finds solid support around $0.00003, the price could sprint to $0.000040.

In short, Bonk's trading volume rose to $1 billion, indicating strong market interest. Its price has now rebounded to $0.00003, but the technical indicators are oversold, which has an impact on its price. A correction is expected to be on the way. Finally, let me say that the current big cake offensive trend is actually not healthy and may lead to a tulip bubble. It is still recommended to reduce positions in batches and lock in profits. After all, you have u in your hand, so you don't have to panic!