How BONK lost its steam after a bright start in 2024

• BONK’s price has fallen by 25% in the last seven days.
• Despite the price decline, funding rates remained positive. 

After a promising surge in value at the start of the year, popular Solana-based meme coin Bonk [BONK] has hit a rough patch. After recording a double-digit price increase on 1st January, its price has since plummeted, dropping by 25% in the last seven days.

According to data from CoinMarketCap, the meme coin ranked as the crypto asset with the most decline in the last week. 

Source: CoinMarketCap

Price decline may continue in the short term

At press time, BONK traded at $0.00001091. An assessment of its price movement showed that the decline in value might continue in the short term unless a significant change in market sentiment occurs. 

AMBCrypto found that the token’s weighted sentiment, which had been positive during the weeks when the coin rallied, flipped into negative on 29th December and has since remained in that position. 

Source: Santiment

As market sentiment changed, token sell-offs climbed. According to BONK’s key momentum indicators, its holders have favored token distribution over accumulation since the year began. 

For example, BONK’s Money Flow Index (MFI) was 17.77. Likewise, its Relative Strength Index (RSI) was 39.36.

At these values, these indicators show that selling pressure has been dominant recently, and the price decline is sure to continue unless new demand enters the market.

The token’s Parabolic SAR (Stop and Reverse) indicator, which has rested above its price since 27 December, confirmed the bearish nature of the market. 

This indicator is used to identify potential trend direction and reversals. When its dotted lines hang above an asset’s price, the market is in a downtrend, and most traders are ready to exit long positions or initiate short ones.

Further, BONK’s Chaikin Money Flow (CMF) returned a negative value of -0.12 at press time. When an asset’s CMF is below the zero line, it signals increased liquidity exit.

It means that investors have chosen to remove money from the market, putting downward pressure on an asset’s price. 

Source: BONK/USDT on TradingView

Realistic or not, here’s BONK’s market cap in BTC terms

Interestingly, despite the recent price drop, futures market participants continue to place bets in favor of a price rally.

According to data from Coinglass, BONK’s open interest has risen by 32% in the last five days. Its funding rates across exchanges have been significantly positive during the same period.