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Bonk Faces 27% Drop as Bearish Pressure Mounts: Can It Happen?
BONK’s decline is likely to extend as sentiment shifts.
As the market continues to show a clear bias towards sellers, it appears that Bonk may face a steep drop of up to 27.20%, according to AMBCrypto analysis.
BONK has been on a declining streak for the past month, which intensified in the past seven days as the asset dropped 10.45%. This decline has continued in the past 24 hours, with the price losing another 2.03%.
Per our examination, a much steeper fall is likely as market participants seek the best price to re-enter and potentially push the price higher afterward.
A technical path on a declining trajectory
Bonk is trading within a descending channel characterized by lower highs and lower lows, with price trends moving within a support and resistance zone. Bonk recently reacted off the pattern’s resistance line and has continued to decline, a move that’s likely to extend further downward to the support level.
The motive behind this fall is that investors are pushing the price lower in search of a discounted level where they can accumulate the asset. This could drive the price to the support level, and strong momentum may eventually push it higher.
Will the drop happen?
Bonk has a high probability of dropping further as market sentiment in the derivatives market remains strongly bearish. One key indicator is the liquidation data, which shows how much long and short traders have lost within a specific period.
Currently, there have been $438,000 in long liquidations, compared to just $6,400 in short liquidations. This indicates that for every dollar worth of long contracts liquidated, only 0.0146 dollars worth of short contracts were closed.
The substantial disparity reveals the market is heavily skewed in favor of shorts, suggesting that prices will continue to fall.
Another bearish signal arises from OI-Weighted Funding Rate, which aggregates Funding Rate and Open Interest data across multiple exchanges. At the time of writing, this metric has crossed into negative territory with a reading of -0.0152. This region is associated with price declines.
Furthermore, two technical indicators—the Parabolic SAR (Stop and Reverse) and Bull Bear Power—also confirm the presence of sellers.
The Parabolic SAR, which utilizes dots to determine potential market direction, suggests downward pressure when dots appear above the price. This implies Bonk could decline further.
Similarly, the Bull Bear Power reveals that sellers are leading market transactions, and the red momentum continues to build, signaling further downward movement. For now, the bears are guiding the market, and if this sentiment persists, Bonk is likely to trend lower.
It appears that Bonk may face a steep drop of up to 27.20%, given the prevailing bearish sentiment in the derivatives market and the confirmation from technical indicators.
Source: https://ambcrypto.com/bonk-faces-27-drop-as-bearish-pressure-mounts-can-it-happen/
