Journalist
Posted: December 12, 2023
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Formation of a range is very likely due to weakened bullish sentiment
- Breakout past the local highs, combined with an increase in Open Interest, would be a strong buy signal
BONK has gone bonkers on the price charts over the past two weeks. It registered gains worth 325%, measured from 27 November to 9 December, before suffering a 33% retracement. And yet, the meme coin is very likely to sustain its recent gains.
At the time of writing, the lower timeframe support level at $0.0000117, as well as a consolidation zone, were still in bullish control. Therefore, the short-term bias of BONK was bullish. Even though the market seems to be overextended, shorting it would be a very risky proposition though.
LTF consolidation zone has served as a demand zone for BONK
Source: BONK/USDT on TradingView
The rally of the past two weeks was used to plot a set of Fibonacci retracement levels (yellow). The 50% retracement level was at $0.0000092. Above it was the lower timeframe consolidation that BONK outlined on the price charts on 7 December.
The one-hour chart showed that this zone, highlighted in cyan above, was where BONK saw a brief lull in its rally. A few hours later, the meme coin blasted skyward once more, demarcating this zone as a support. It was retested twice in the past week, and both times saw BONK bounce higher.
The RSI continued to remain above the neutral-50 level on the 4-hour chart. The On-Balance Volume also climbed above last week’s local high and indicated that buying volume was on the rise. Therefore, a revisit of the $0.00001 area would present a buying opportunity. Bullish targets included $0.0000149 and $0.0000219, which were Saturday’s high and the 61.8% Fib extension level, respectively.
Recent dip saw market participants grow more cautious
The funding rate of the meme coin has continued to tread positive territory on Binance. This is a sign that traders have been more disposed to long the asset than to go short. However, the Open Interest told a slightly different story.
Realistic or not, here’s BONK’s market cap in BTC’s terms
The OI began to recede on 9 December as BONK bears forced the prices lower. While the coin is still on an uptrend of sorts, the dip in OI and prices did show bullish sentiment had weakened considerably.
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