- BONK has a bearish market structure on the 12-hour chart.
- The sentiment behind the meme coin was also bearish.
Bonk [BONK] posted strong gains this past week, with a 92% gain between January 8 and 10. Despite the notable rally, the higher timeframe price chart showed that BONK had a bearish outlook.
At the time of writing, BONK bulls were fighting to defend a $0.000013 support level. A drop below this level would likely push prices down another 25% to 30%.
Understanding BONK’s bearish bias
Source: BONK/USDT on TradingView
On the 12-hour chart, BONK placed a bearish order block at $0.000016. This zone was marked by the red box and has been in play since December 29. On January 10 and 11, BONK bulls briefly pushed prices above this area.
However, they couldn’t host an H12 trading session close up there. Moreover, the bears were able to cut prices again, which was a sign of the dominance of the sellers. The RSI stood at 48 at the time of writing, providing an early signal that momentum has turned bearish.
Despite these bearish observations, the OBV has remained above the December pump high. This level has functioned as support in recent days. This suggested that the selling volume was not overwhelming and underlined that the bulls have some hope.
BONK market sentiment was negative
Source: Santiment
AMBCrypto looked at some of Santiment’s social metrics to better understand where BONK stood. Social volume has been on a downward trend over the past month.
The weighted sentiment behind the meme coin has also been consistently negative during the downtrend.
Source: Mint glass
The almost 100% rally resulted in a huge jump in Open Interest. This meant that speculators were attracted to bet on their short-term bullish belief on the token.
But after the rejection at the bearish order block, the OI has fallen along with prices.
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This indicated bearish market sentiment and discouraged longs. Investors and swing traders can wait for the $0.000016 area to turn into support before looking for buying opportunities.
Alternatively, a return to the $0.00000925 level could also see a significant jump.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.