BONK memecoin is experiencing a downtrend due to a lack of buyer interest and reduced derivative trading activity. Technical indicators like Chaikin Money Flow and Money Flow Index point towards selling pressure. The decline in Open Interest and trading volumes suggests a potential for stable prices but also raises concerns about weak price movements. Liquidation clusters below the current price level threaten to further fuel the sell-off.
Memecoins have been under bearish pressure, as their total market capitalization has declined by 15% to $97 billion in the last seven days.The memecoin’s downward momentum could continue due to the lack of interest from buyers in the spot market and fewer derivative traders betting on its future performance. BONK ’s daily chart shows the memecoin trading within a descending parallel channel. This indicates a prolonged downtrend due to higher selling activity than buying activity.
At press time, the memecoin was testing support at the channel’s midline. If it drops below this, it could fuel bearish momentum. BONK needs to rally past the upper trendline with high buying volumes for a bullish reversal.The Chaikin Money Flow indicator is in the negative region indicating there is selling pressure, and BONK is likely in a distribution phase. The Money Flow Index shows a similar outlook amid a drop to 47, indicating that bears have the upper hand.
The memecoin’s Open Interest has dropped by 28% in one week to $14.12M, according to Coinglass. At the same time, 24-hour derivative trading volumes stood at $36M, the lowest since the start of the year. This decline could lead to stable prices due to reduced volatility, but the reduced interest might cause negative sentiment and weak price movements.In the last four days, over $1M worth of BONK long positions have been wiped out, increasing sell-side pressure. Despite these liquidations, several clusters below the current price could drive prices lower.
The closest liquidation cluster is at $0.0000273, followed by others at $0.0000270 and $0.0000267. If BONK drops to these zones, the resulting liquidations will fuel the downtrend.Conversely, the lack of liquidation clusters above the current price could hinder the uptrend and result in consolidation at the current zones.Mary is a seasoned crypto news writer passionate about blockchain technology, digital assets, and Web3.
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