BONK: analyzing potential ATH breakout
Bonk [BONK], originating from the Solana [SOL] ecosystem as a viral meme token, experienced a 20% increase in its weekly price metrics. Currently, it's valued at $0.00004095, just 17% shy of its all-time peak of $0.00004770 reached on March 4th.
Surpassing the all-time high would catapult BONK into uncharted price realms, marking a phase of price discovery.
Under such circumstances, a cryptocurrency analyst, Ninja Scalp, predicted a potential surge for BONK, reminiscent of its early March performance.
“$BONK – when the canine-themed token previously ventured into price discovery in March, we witnessed a significant uptick in trading activity on the Solana network, with daily volumes around ~$2b. Could we see a repeat of history?”
It's critical to remember, though, that past performance is not always indicative of future results.
Nonetheless, BONK has drawn considerable on-chain buying interest alongside a notably positive outlook from the market, as illustrated by the trading Volume (highlighted in white) and the Weighted Sentiment (in red).
This confirms BONK's optimistic market positioning.
Notably, Ninja Scalp's commentary on the Open Interest (OI) spike during the token's price discovery phase is manifesting currently. OI serves to measure the inflow of capital and market sentiment within the futures market.
As of now, BONK's OI has reached a new zenith of $24 million, surpassing the $20 million peak during its early March price discovery phase.
This spike in OI indicates a significant influx of capital recently, hinting at a bullish outlook in the futures market.
However, liquidity analysis reveals significant liquidation points positioned at the lower end of the price spectrum, notably around $0.000035 and $0.000040 (indicated in orange).
Price trends generally gravitate towards areas with dense liquidity (in orange). If this pattern unfolds, BONK's price might retract to $0.000040 or $0.000035 before attempting an ascent towards $0.000045.
The highlighted liquidity pockets coincide with the 23.6% and 38.6% Fibonacci retracement levels.
Should the bulls fortify the 23.6% Fibonacci level, BONK's price could aim for immediate highs at the previous all-time high (0.000048) and then $0.000056.
Despite evident buying pressure, as indicated by a bullish Relative Strength Index (RSI) reading, the Chaikin Money Flow (CMF) hasn't surpassed the average mark.
During the last price discovery, the CMF stood above zero, indicating substantial capital inflow, yet current readings lag behind those of March.
Moreover, BONK's imminent rallies could be hampered if Bitcoin [BTC] struggles to maintain its stance above the $67K benchmark.
As per Ninja Scalp, a significant rise in OI coincides with BONK's approach towards another price discovery. Despite this, the bullish trend may falter if BTC faces further depreciation.
