Last week, Memecoin became the currency with the largest weekly decline, as mid-cap and large-cap Altcoins took center stage in the new round of Altcoin season. Bonk[BONK] saw increased profit-taking after reaching a new high of $0.000062.
As of the time of writing, BONK has fallen 29% from its all-time high. While this may be part of a larger trend of capital rotation, here are the key levels that bulls can track.
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Evaluating BONK's Pullback
Although the new ATH slightly failed to reach the extended Fibonacci golden ratio (around -61.8%), if an uptrend emerges after the pullback, this level may be overturned as the next bullish target.
Nevertheless, the uptrend has left key price imbalances at the two white areas (Fair Value Gaps, FVGs). The immediate price imbalance level is above the 23.60% Fib, while the second price imbalance level is at the 50% Fib.
The latter also coincides with the 50-day SMA, suggesting that if the pullback breaches $0.000039, it may provide stronger support. Therefore, if the bullish momentum persists, these could become key re-entry points for the bulls.
Given that the Stochastic RSI is in overbought territory, BONK may face additional pullback if the bears continue to take profits.
Demand Plummets
In the first half of November, spot market demand (increase in spot cumulative trading volume - rising CVD) drove the price increase, followed by the futures market (a surge in open interest) also driving the price increase.
However, both the futures and spot markets have seen a decline in demand, as evidenced by the southward trend of OI and spot CVD.
Unless the meme coin narrative regains dominance, this may further complicate a strong recovery.
Another bearish indicator is whales reducing their risk. Whales on the Binance exchange have been steadily unwinding their long positions since mid-November, as evidenced by the negative delta between whales and retail.
Historically, a reduction in large-scale participation has led to a stagnant or declining price. This may weigh on BONK in the short term.
For potential price reversals, traders can track key levels and potential whale re-entries, which may signal a possible recovery for BONK.
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