Bonk (BONK) Drops 5.50% Amid Market Sell-Off

Bonk (BONK), a popular meme coin based on the Solana blockchain, is currently facing a significant price decline. This bearish outlook comes at a time when major cryptocurrencies are experiencing substantial sell-offs and price crashes.

Technical analysis indicates that BONK is showing bullish signals, such as bullish divergence and the formation of a bullish double-bottom price action pattern. However, the overall market sentiment and downward momentum in major assets like Bitcoin (BTC) and Ethereum (ETH) are influencing smaller market cap cryptocurrencies, including BONK.

Historically, the key level of $0.0000095 has acted as strong support for BONK. Since December 2023, the meme coin has experienced multiple upward moves after bouncing from this level. Experts and traders are anticipating a similar move, but the current unfavorable market sentiment poses a challenge to BONK’s bullish outlook.

The daily chart reveals that if BONK fails to hold the $0.0000095 level and closes a daily candle below $0.0000088, it could drop by 38% to reach the next support at $0.0000055. Conversely, if BONK holds this level, there is a possibility of an upside rally, repeating historical patterns.

At the time of reporting, BONK is trading near $0.000009677, recording a price decline of over 5.50% in the past 24 hours. Its trading volume has dropped by 55%, indicating lower participation from traders and investors, potentially due to the current market sentiment.

Given the strong bearish market and downward momentum in BONK, traders are heavily betting on the bearish side. According to on-chain analytics, traders are over-leveraged at $0.0000095 on the lower side (support), where only $11.30K worth of long positions have been built. In contrast, $0.00001062 is another over-leveraged level on the upper side (resistance), where traders have built $271.30K worth of short positions.

This on-chain metric suggests that short sellers are currently dominating, with minimal interest in going long on BONK. This could easily push the meme coin lower and lead to a breach of its support level.