- Bonk price has shot up 105% in the past five weeks.
- A retracement into $0.0000216 or the $0.0000152 to $0.0000186 imbalance would be a good buying opportunity.
- Patient investors can expect double-digit gains from BONK that could extend up to 70%.
Also read:BONKdefies market dip, soars more than 12% after community approves token burn
Deconstructing the meme coin rally
Bonk (BONK) price witnessed a 105% rally in just five days, and it is not the only meme coin to do the same. Dogwifhat (WIF) has also registered an 82% gain in just ten days, starting April 13. Shiba Inu (SHIB) saw a 54% rally between April 13 and 21. This recovery rally, after a prolonged downtrend in the altcoin markets, suggests that investors have turned from risk-off to risk-on and are ready to invest.
So far, only a select few meme coins have noted massive gains. Considering that this category was wildly popular before the multi-week downtrend, it is natural that investors bid for these tokens first. Although WIF and other newly-launched meme coins dominated the headlines, BONK, FLOKI and other relatively old coins silently registered massive gains. So, the recent rally in Bonk suggests that the market sentiment has shifted from being risk-averse to risk-on.
Read more:Solana meme coin Dogwifhat surges 48%, outperformingBONK, DOGE
Bonk price sets the stage for next leg
Bonk price witnessed a meteoric rise, starting April 19, which led to a 105% rally in the next five days. This development is crucial for BONK due to two reasons:
- The triple-digit move suggests that the market sentiment is changing, and meme coin mania has likely made a comeback.
- Due to this parabolic recovery rally, the ongoing seven-week downtrend has ended, opening up the potential for restarting the uptrend.
The Bonk price action shows BONK bulls fell short of momentum, leaving it between the $0.0000246 and $0.0000216 levels. Going forward, investors can expect the meme coin to consolidate between these barriers, accumulating orders from both sides. A potential dip into the daily imbalance, extending from $0.0000152 to $0.0000186, will be the best buying opportunity for sidelined buyers. Depending on the investor sentiment and bullish momentum, sometimes the correction might not allow BONK to go beyond a sweep of the $0.0000216 level.
The Relative Strength Index (RSI) and the Awesome Oscillator (AO) are both in positions of strength, suggesting that the bulls are in control. The RSI has flipped the 50 mean level and is now looking to retest it as a support level. Likewise, AO has also overcome the 0 mean level from below and is now suggesting the start of a bullish reign.
Here’s what to expect from BONK next:
- A buy-the-dip opportunity at $0.0000216 or the imbalance between $0.0000152 to $0.0000186 imbalance.
- A flip of the $0.0000245 resistance level into a support floor.
After the above two conditions are met, investors can expect BONK to resume its recovery rally by visiting $0.0000299, which is the mean level of the 75% downtrend witnessed between March 4 and April 13.
If the markets are done with the downtrend, there is a high chance Bonk price overcomes the aforementioned key hurdle and retests the 62% and 70.5% retracement levels at $0.0000342 and $0.0000373, respectively.
In total, the move from $0.0000216 to $0.0000373 would constitute nearly 73% gain.
BONK/USDT 1-day chart
Supporting this move is the spike in BONK's social dominance, which has remained high despite the recent correction. This outlook suggests that Bonk’s social activity will remain relatively high. Likewise, the volume of the meme coin continues to be at peak levels even as BONK undergoes a pullback, suggesting that investors are interested in the altcoin at current levels.
BONK social dominance, volume
On the other hand, if Bonk price fails to see much buying activity within the $0.0000152 to $0.0000186 imbalance, it would denote weakness in the market. This development shows that the market is not primed for a bull run yet. A breakdown of the $0.0000186 level via a daily candlestick close would invalidate the bullish thesis for BONK.
This outlook could further attract selling pressure, knocking Bonk price down to the range low of $0.0000118.
Also read:Here’s whyBonkInu price could lead the meme coin pack with 30% rally
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