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The value of Solana ecosystem’s popular memecoin project Bonk experienced a significant drop last week. At the time of writing, BONK was trading at $0.000021, with its price falling by 24% over the past seven days. This decline caused BONK’s price to fall to the critical support level of the descending triangle pattern it has been trading within since May. Some key technical indicators suggest a further drop below this level.
Why is BONK Dropping?
BONK’s daily chart readings show that the altcoin has been moving within a descending channel since May 29. With its current price, BONK’s value has dropped by 42% since then. This pattern emerges when an asset’s price forms a series of lower highs and a horizontal support level. When the price falls below the horizontal support level, it confirms the continuation of the downtrend. At the time of writing, BONK is trading at this support level of $0.000021.
Some fundamental technical indicators evaluated on BONK’s daily chart confirm the likelihood of falling below this level and continuing the downtrend. For example, BONK’s Relative Strength Index (RSI) is at 36.35 and is in a downtrend as of the date of this writing.
BONK’s RSI value of 36.60 indicates significant selling pressure in the memecoin project’s market. It shows that market participants are selling more of their assets than buying new tokens, exerting downward pressure on the altcoin’s price.
BONK Chart Analysis
BONK’s MACD indicator setup confirms the bearish trend for the memecoin project. At the time of writing, the MACD line (blue) is below the signal (orange) and zero lines. When an asset’s MACD line falls below the signal line, it indicates decreasing price momentum and an imminent continuation of the downtrend. Further crossing below the zero line confirms a strong bearish trend as the short-term moving average falls below the long-term moving average.
Investors may interpret this bearish signal as a sign to exit long positions and take short positions in the futures market. If BONK investors cannot defend the support level, the memecoin price could drop to $0.000012. This represents the months-long low level that BONK last traded at on April 12. However, if market sentiment shifts from negative to positive and BONK sees an increase in accumulation, this could push its price towards $0.000025.
