The tide seems to be turning for the whimsical world of meme coins. After a brutal sell-off in early July that dragged down even established giants like Bitcoin, some meme coins are showing signs of life. BONK, the Solana-based meme coin, is leading the charge with a whopping 44% price jump in the past week, surging from $0.000018 to $0.0000261.
BONK Bucks the Trend with Double Bottom Breakout
While the broader market took a beating, BONK displayed impressive resilience. Twice in the last three weeks, the price bounced back from the $0.000018 support level, hinting at strong buying pressure. This price action forms a bullish “double bottom” pattern on the daily chart, historically a sign of a trend reversal and potential breakout.
Adding fuel to the fire, a recent proposal to burn a significant portion of BONK tokens has ignited investor interest. This proposed burn, equivalent to the Q2 BONK sent to the Bonk DAO treasury (approximately 84 billion tokens), could significantly reduce the overall supply of BONK. Scarcity, as dictated by the principle of supply and demand, could theoretically drive up the value of remaining tokens.
Technical Analysis Suggests Further Upside
Technically, BONK sits on the cusp of a breakout. The price is nearing the $0.000027 resistance level, which forms the neckline of the aforementioned double bottom pattern. A successful breach of this resistance could flip it into support and propel BONK further upwards.
Analysts project a post-breakout rally that could push BONK towards $0.000035 and even $0.000045. Additionally, an ascending trendline on the daily chart since February 2024 suggests underlying bullish momentum. This trendline has consistently acted as dynamic support, encouraging buyers to hold and potentially push prices higher.
EMAs and ADX Hint at Weakening Bearish Grip
The recent price surge has allowed BONK to reclaim its position above key Exponential Moving Averages (EMAs) – the 20, 50, 100, and 200-day EMAs. This is an early sign of a potential trend reversal from bearish to bullish.
Furthermore, the Average Directional Index (ADX), a measure of directional strength, displays a declining slope. This suggests the prevailing bearish pressure is losing momentum, potentially paving the way for a sustained bullish run.
BONK’s Revival – A Sign of Meme Coin Resurrection?
While BONK’s recent surge is encouraging, the future remains uncertain. The cryptocurrency market is notoriously volatile, and meme coins are even more susceptible to wild swings. However, BONK’s technical indicators, coupled with the proposed token burn, paint a cautiously optimistic picture. Whether BONK can maintain this momentum and usher in a new era of meme coin dominance remains to be seen, but its recent performance is certainly a head-turner in the crypto space.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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