PONKE, the Solana-based memecoin that recently made headlines for a spectacular price surge, appears to be at a crossroads. After a lucky trader turned a small investment into a massive profit, the question remains: can PONKE maintain its momentum?
While PONKE briefly revisited its all-time high near $0.50, it has exhibited some signs of struggle. The price experienced an 11% dip but has since recovered slightly, currently trading at around $0.44. Despite staying above its ascending support line, technical indicators hint at a possible price decline.
The Relative Strength Index (RSI) reached an overbought level of 85% on May 18th and has been steadily dropping ever since. This “bearish divergence” suggests a potential reversal in price direction, contradicting the recent price increase. The daily Moving Average Convergence Divergence (MACD) also flashed a bearish signal on May 21st with a “death cross,” further strengthening the case for a downtrend.
Double Top Formation: A Signal of Weakness?
The price chart also presents a concerning pattern. PONKE appears to have formed a “double top,” reaching its peak twice before falling back. A confirmed breakout below the ascending support line would solidify the downtrend scenario, potentially pushing the price down to $0.35, a key support level based on the 0.382 Fibonacci retracement.
However, there’s an alternative perspective. The current correction could be interpreted as the fourth wave of a larger five-wave impulse pattern in Elliott Wave Theory. This scenario suggests PONKE might be undergoing a temporary pullback before resuming its upward trajectory.
If this plays out, PONKE could potentially reach even higher than its previous all-time high. The exact target price would depend on the severity of the current correction and the strength of the following uptrend. But exceeding the all-time high could put values above $0.50 on the table, with $0.55 potentially within reach.
The Verdict
PONKE’s recent price action presents both bullish and bearish possibilities. While the technical indicators suggest a potential downtrend, the possibility of a larger five-wave pattern cannot be ignored. Investors should exercise caution and closely monitor PONKE’s development in the coming days. A confirmed breakout below the ascending support line would strengthen the bearish case, while a decisive break above the recent highs could signal a move towards new all-time highs.
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