BONK’s 9-Month Consolidation Breakout: Will The Momentum Hold Post ATH?

BONK price action showed a massive breakout from a descending wedge pattern that confined its movements for over nine months.

The currency experienced fluctuating fortunes as it navigated this extensive consolidation period. In recent weeks, however, BONK surged past its former peak levels, establishing new all-time highs.

This breakout was a sharp upward movement, marking a departure from the previous downtrend and resistance levels within the wedge.

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The EMA (200-day moving average), showed that after several touches and rejections from this moving average, BONK finally sustained its position.

This move indicated strong buying momentum and a potential shift in market sentiment from bearish to bullish.

The volume bars along the bottom of the chart further validated this surge, with an increase in trading volume coinciding with the breakout points. This alignment suggested increased participation in the rally due to the breakout’s strength.

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Given this momentum and the successful breach of the previous resistance-turned-support, the outlook for BONK appears optimistic.

If the memecoin maintains its current trajectory above the critical EMA line, there is a strong possibility for the continuation of this surge.

This promising pattern suggested that BONK could maintain its ascent, reaching higher peaks in the forthcoming months.

BONK Liquidation Heatmap

The liquidation heatmap for BONK in the past week revealed that key liquidity zones were identified around the $0.000045 and $0.00005 price levels. Dense concentrations suggested a rise in trading activity and the placement of many stop-losses and liquidation points.

The heatmap displayed spikes in liquidity, especially near $0.000058, where BONK recently peaked.

This area signified a potential reversal zone as traders who entered at lower levels could look to capitalize on the recent surge by taking profits, thereby increasing selling pressure.

Further analysis indicated that BONK’s price progression gravitated towards these higher liquidity zones. It reflected a common market behavior where the price tends to move towards areas flush with liquidity, likely due to the triggering of placed orders.

Following BONK’s attainment of new ATHs, the chart suggested a possible pullback towards these dense liquidity pools situated lower.

This potential retreat could be a correction phase where BONK gathers momentum before possibly climbing again.

Such movements affirm the cyclical nature of markets where after significant rallies, retracements are often necessary for setting the stage for future runs.

OI-Weighted Funding Rates

Additionally, since the US election day, the BONK OI-Weighted Funding Rate revealed a consistent increase in the funding rates, confirming that long traders have been compensating short traders.

It also reflects a bullish outlook among investors. This trend continued unabated, with noticeable peaks corresponding to significant price surges in BONK’s valuation.

The chart showed a pattern where the funding rates peaked shortly before substantial price corrections. While market sentiment remains fundamentally positive, traders should expect volatility with potential pullbacks following sharp increases.

These corrections likely serve to consolidate gains and eliminate over-leveraged positions, making the subsequent rally healthier and more sustainable.

The volume-weighted funding rate closely tracked these changes, reinforcing the observed trends in market behavior.

With funding rates maintaining above the zero line, it is evident that the market has a robust bullish undercurrent.

Despite the potential for short-term corrections, the prevailing positive funding rate environment provides a strong case for BONK’s continued upward trajectory even after reaching new highs.

Such a scenario indicates that the market could sustain its rally, buoyed by enduring trader confidence and ongoing investment inflow.