BONK Price Continues to Decline as Market Responds to New Fed Approach
Note: Your gift is in my account in the pinned post 🤑
The chart of the BONK/USD pair’s price movements shows that it has been following a clear downward path since reaching its highest levels on December 20 at $0.00005029. The chart above shows the formation of a descending channel with declining upper and lower levels, which is an indication of a significant decline in demand for the currency, as the Federal Reserve’s statements - which were more hawkish than expected during its last monetary policy meeting - contributed to the decline in the value of most digital assets, and the US central bank announced its intention to cut interest rates twice over the next year instead of the three times that were scheduled to be implemented. In the same context, market participants interpret this move as an indication of the possibility of inflation rates rising again in the next 3-6 months, which may increase the chances of the Federal Reserve stopping implementing its monetary easing policy; Low interest rates are often seen as a catalyst for investing in riskier assets like cryptocurrencies, as investors’ appetite for risk increases and liquidity flows into the markets. Despite this temporary weakness, the meme coin category saw a remarkable recovery after Donald Trump was declared the winner of the US presidential election last November, paving the way for most of them to surge and hit new highs since then. BONK is no exception, with gains of 134%.4% YTD. Finally, the chart currently shows that the price could continue to decline in the foreseeable future unless the upper barrier of its descending channel is breached soon at some point, and given the significant gains that meme coins have made recently, the current correction is very necessary as it allows late-stage investors to take advantage of the opportunity to buy at lower levels. BONK Price Continues to Decline as Market Responds to New Fed Approach
The chart of the BONK/USD pair’s price movements shows that it has been following a clear downward path since reaching its highest levels on December 20 at $0.00005029. The chart above shows the formation of a descending channel with declining upper and lower levels, which is an indication of a significant decline in demand for the currency, as the Federal Reserve’s statements - which were more hawkish than expected during its last monetary policy meeting - contributed to the decline in the value of most digital assets, and the US central bank announced its intention to cut interest rates twice over the next year instead of the three times that were scheduled to be implemented. In the same context, market participants interpret this move as an indication of the possibility of inflation rates rising again in the next 3-6 months, which may increase the chances of the Federal Reserve stopping implementing its monetary easing policy; Low interest rates are often seen as a catalyst for investing in riskier assets like cryptocurrencies, as investors’ appetite for risk increases and liquidity flows into the markets. Despite this temporary weakness, the meme coin category saw a remarkable recovery after Donald Trump was declared the winner of the US presidential election last November, paving the way for most of them to surge and hit new highs since then. BONK is no exception, with gains of 134%.4% since the beginning of the year. Finally, the chart currently shows that the price may continue its decline in the foreseeable future unless the upper barrier of its descending channel is breached soon at some point, and given the significant gains that meme coins have made recently, the current correction is very necessary as it allows late investors to take advantage of the opportunity of the price reaching lower levels to buy.
Perhaps the above is the main reason behind the BONK coin’s 7% price increase last week, making it one of the few meme coins that achieved a positive performance during it. It is noteworthy that on December 20, when the project developers announced that they had reached their first milestone of burning one trillion coins, the BONK/USD price rose by 14%, but it did not escape the correction wave that hit the crypto markets during the past few days, settling at a loss of 25.6% compared to its value 30 days ago. Other coins also went through a similar correction wave during the same period, including Dogecoin (DOGE), which dropped by 20.2%, and DogWifHat (WIF/USD), which lost 42.6% over 30 days. The burning process is known as sending a certain amount of the circulating supply of a digital currency to a specific crypto wallet address that is used as the final destination for the desired amount. Permanently removing it from the total supply, where an automated smart contract is created for this final removal process, in addition to verifying the identity of the contributors to ensure that they own the specified amount to be sent to the burn address. Once this process is carried out, these coins disappear completely from the total supply and lead to a permanent reduction in it. The main goal of burning is to give the supply of the currency a scarcity character, which can contribute - theoretically - to increasing the value of the asset over time provided that demand remains constant or increases. Data from CoinMarketCap indicates that the total supply of BONK is currently 92.66 trillion coins. Therefore, removing 1.69 trillion BONK coins would reduce the circulating supply by 1.8%.