Nov 25, 2024

6thTrade

Memecoins took a backseat this past week as large and mid-cap altcoins gained momentum amid calls for a renewed altcoin season. Among the top losers was Bonk (BONK), which saw a sharp 29% drop after reaching a new all-time high of $0.000062, driven by profit-taking from whales. As capital rotates elsewhere, here are the critical levels BONK bulls should monitor.

Analyzing BONK’s Pullback

BONK recently hit a new all-time high, but the rally failed to extend to the golden Fibonacci ratio (-61.8%), which could serve as the next bullish target during a potential upswing.

The pullback left significant price imbalances at two key zones (fair value gaps or FVGs). The first FVG lies just above the 23.60% Fibonacci level, while the second is at the 50% Fib retracement level, aligning closely with the 50-day Simple Moving Average (SMA).

If BONK’s pullback continues below $0.000039, the 50% Fib level could act as a stronger support zone, offering bulls a potential re-entry point. However, the Stochastic RSI indicates elevated and oversold conditions, suggesting that additional selling pressure could deepen the pullback if short sellers remain active.

Demand Weakens Across Markets

In early November, BONK’s rally was supported by rising demand in the spot market, as evidenced by an increase in the Cumulative Volume Delta (CVD). This trend was later mirrored in the Futures market, where Open Interest (OI) surged.



Source: Coinalyze

However, both spot and Futures demand have since dwindled, with OI and spot CVD showing downward trajectories. This sharp drop in demand poses a challenge for BONK’s recovery, as strong market interest is necessary for sustained upward movement.

Whale Activity Raises Concerns

A significant bearish signal is the continued de-risking by whales. Data from Binance reveals that whales have been steadily offloading their long positions since mid-November, as indicated by negative readings on the Whale vs. Retail Delta.

Historically, reduced participation by large players has led to price consolidation or muted recoveries. Without renewed whale interest, BONK may struggle to regain its upward momentum in the short term.

Key Levels to Watch for Recovery

For a potential reversal, traders should keep an eye on critical support and resistance levels:

  • Support Zones:

    • $0.000039 (50% Fib and 50-day SMA)

    • Immediate FVG above the 23.60% Fib

  • Resistance Levels:

    • $0.000062 (recent ATH)

    • Extended golden Fibonacci ratio (-61.8%)

Additionally, monitoring whale activity for signs of re-entry could provide valuable signals for a potential recovery.

Conclusion

BONK’s sharp pullback, coupled with declining demand and whale profit-taking, raises questions about its short-term recovery prospects. Unless memecoins regain dominance or whales re-enter the market, BONK may face a period of consolidation. Traders should closely monitor critical price levels and market dynamics to anticipate the next move for this volatile token.