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Cryptocurrency News Articles
BONK Price Prediction: Meme Coin Due for 40% Correction as Market Overheats
Oct 01, 2024 at 03:30 pm
Popular meme coin BONK has been on a tear recently, with prices skyrocketing by nearly 50% over the past week. While this has put many holders in gains
Popular meme coin BONK has rallied relentlessly over the past week, notching up gains of nearly 50%, to the delight of many holders. However, the market has heated up rapidly, and some key indicators suggest that a price correction may be on the horizon.
If buyer exhaustion does set in, the meme coin could be looking at a 40% price decline. Here’s why.
BONK market heats upAn examination of BONK’s derivatives market shows a decline in the token’s futures open interest over the past few days.
After climbing to a three-month high of $15 million on September 29, the meme coin’s futures open interest, which tracks the number of outstanding futures contracts, has declined by 29%. At the last check, this stood at $10 million.
Curiously, BONK has maintained its uptrend, rising by 13% during that period. The declining token open interest as the price rises suggests that fewer new participants are entering the market.
This signals that the upward trend may be losing strength, and if fresh buyers fail to back the rally, it may not be sustained for long.
Moreover, BONK’s double-digit rally has seen a market volatility surge, evident in the widening Bollinger Bands indicator. At the time of writing, BONK trades slightly above the upper band of this volatility marker.
Typically, when this occurs, it implies that the current market trend (an uptrend in BONK’s case) is likely to continue, at least in the short term.
However, as the price moves too far outside this upper band, it signals that the asset has been overbought, which may lead to a pullback or correction in the near future.
This is further confirmed by BONK’s Relative Strength (RSI). At 74.33, the indicator, which gauges an asset’s oversold or overbought market conditions, shows that the meme coin is overbought.
An RSI reading of 73.75 suggests imminent buyer exhaustion, which is often followed by a price drop.
BONK price prediction: It’s all on the bearsA surge in profit-taking activity as BONK’s price reaches new highs could trigger a pullback.
If this occurs, the meme coin will likely attempt a retest of resistance at the $0.000022 level. Should selling pressure intensify at that point, BONK may continue its decline, seeking support around the $0.000015 level.
However, a successful retest of the resistance level could see BONK resume its uptrend, bolstering bullish sentiment toward the altcoin.
In this scenario, BONK’s price could rally toward $0.000033, potentially clearing the way to a four-month high of $0.000044.
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
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