- With a 33% weekly gain, Solana’s BONK has surpassed $2 billion in global market capitalization.
- Shiba Inu-themed BONK is currently down 29.7% from its March 2024 high.
- Analysts predict that BONK will move south to shed its overly leveraged positions.
Solana’s Bonk (BONK) began its first double-digit bull run in seven days, surpassing the $0.000030 resistance level. With BONK breaking this critical price range on its third attempt, cryptocurrency analysts are now gauging the sustainability of the latest uptrend.
“When BONK rises above this level, magic happens.” Cryptocurrency analyst WebTrend Analytics for Crypto analysts note BONK’s confluence resistance in this price area, which could create a new all-time high for BONK if a breakout to the north occurs.
BONK set a record on March 4, 2024, at the start of the most successful meme coin bull cycle of all time. BONK then claimed an all-time high of $0.00004547 before falling back below the $0.00003 support in less than three days. However, this time, the possibility of a retest of the all-time high largely depends on BONK’s pockets of liquidity remaining in the $0.00003 price range.
Will there be massive liquidations on BONK’s parade?
The increase in clearing of BONK derivatives can be seen in areas of high liquidity, as shown in the graphic below compiled from CoinGlass on-chain data. If liquidations from both long and short positions accelerate rapidly, BONK’s upward momentum may be paused to allow for a strong market correction to eliminate excessive leverage and late long entries.
However, the possibility of securing short-term liquidity in a leveraged position does not necessarily mean a sharp decline in the price of BONK. According to BONK’s historical price action, we see massive liquidations on March 4th and the following days, with BONK reaching its all-time high. When BONK rose to $0.00004547, derivative liquidation volume surged on both sides.
For example, on the all-time record high, liquidation of BONK short positions reached $3.39 million and long positions reached $2.45 million. BONK’s long position holders got a bigger slice of the liquidation cake the next day, March 5, with $3.35 million in long positions liquidated, compared to $1.35 million in short positions liquidated.
According to CoinGecko, BONK is changing hands at $0.00003197 at press time. If the popular Solana meme coin stays above the $0.000030 resistance barrier, the upward momentum could push BONK up to $0.000037. However, a daily close below this resistance area is likely to test the support clusters of $0.000020 and $0.000013.
On the flip side
- Since BONK’s founding, the Shiba Inu-themed meme coin has increased market depth but has faced new competitors.
- For example, Dogwifhat (WIF) has surpassed BONK in market capitalization and has a similar trading volume in derivatives of $1.39 billion.
Why This Matters
Debuting on Christmas Day 2022, Bonk successfully gave Solana a second lease of life, contributing to a thriving Layer 1 ecosystem with annualized returns of a whopping 7,964%.
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