BONK eyes 77% breakout as price holds key support at 200 EMA

• BONK’s bullish momentum was intact unless the price drops below key moving averages
• Short sellers may rejoin the market if BONK slips below $0.000018

BONK, at the time of writing, seemed to be in a great position to post extra gains, despite a +140% recovery since April. 

Notably, the memecoin has maintained its uptrend on the charts, as shown by the rising channel (white). That’s not all though as the price action tagged key pivotal levels – A sign that the rally may be far from over. 

BONK defends key support

Source: BONK/USDT, TradingView

On the daily chart, the 200-day EMA (Exponential Moving Average, blue), was a notable obstacle in April. In May, the level (200EMA) was confirmed as support, which also aligned with the channel’s range low. 

This meant bulls are now firmly in control of the market, with the price action staying above its short and long-term moving averages. On the upside, the immediate bullish targets were $0.000025 and $0.000035. 

An extended rally to the latter ($0.000035) would translate to 77% potential gains.

This bullish outlook can be supported by the daily RSI (Relative Strength Index), which has stayed above the mid-level since April. This suggested that demand has been above average. 

However, capital inflows have stagnated since mid-May, as revealed by the flat CMF (Chaikin Money Flow). This meant that the memecoin is yet to attract massive bids after the recent cool-off. 

That being said, the aforementioned bullish thesis would be invalidated if BONK’s price action slips below the long (200-EMA) and short-term (50, 100-EMA) moving averages. 

Speculative interest recovers

Source: Coinalyze 

According to Coinalyze, BONK’s spot market demand recovered. It did so somewhat sluggishly from mid-May though, as shown by the spot CVD (Cumulative Volume Delta, orange). 

However, demand in the derivatives market saw a steady rebound, as illustrated by the Open Interest (OI) rate surge from $8.5 million to over $12 million.

This reflected strong speculative interest in the Futures market and may boost recovery odds. 

From a liquidation heatmap perspective, the main likely price magnet would be a liquidity pool within the $0.000019-$0.000020 area (bright yellow zones) and $0.000018. 

Source: Coinglass

The aforementioned levels aligned with the long-term (200 EMA) and short-term (100 EMA) moving averages. 

Simply put, the moving averages were key levels to watch for BONK bulls. Any decisive and sustained drop below $0.000018 would suggest a market edge for short sellers. So, the level could act as a stop loss for traders eyeing a long position. 

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion