BONK presents buyers with another chance to go long

• BONK exhibited bearish momentum and structure.
• A reversal was possible, but buying volume maintained a downtrend.

Bonk [BONK] continued to trade within a range that is now almost six weeks old. The approach of the lows presented a good risk-to-reward buying opportunity.

A recent AMBCrypto report noted that the sentiment behind the meme coin was pessimistic.

The technical indicators also espoused a bearish outlook. Yet, the price action signaled a reversal was likely and nearby. The possibility of a liquidity hunt meant traders might have to opt for looser stop-losses.

An ideal buying opportunity

Source: BONK/USDT on TradingView

At press time, BONK has a bearish market structure on the 12-hour chart. BONK has traded within a range that extended from $0.00000944 to $0.0000171 over the past six weeks.

The RSI was below neutral 50 and has been that way since mid-January. This highlighted bearish momentum and a downtrend in progress, and agreed with the market structure.

The OBV began to descend slowly over the past ten days to underline increased selling volume.

The mid-range resistance at $0.0000126 rebuffed the bulls on the 28th of January. At press time, BONK was close to the range lows.

However, buyers would need to be wary of liquidity hunts below the range lows and manage risk and stop-loss orders accordingly.

A drop below $0.0000075 would indicate a strong downtrend was likely, with the next target being the $0.0000048 support level.

The waning speculation pointed to further range-bound price action

Source: Coinglass

AMBCrypto analyzed data from Coinglass to understand the futures market outlook. Since mid-December, the Open Interest has steadily trended downward.

Even after the range formation, the OI continued to slide lower.

Realistic or not, here’s BONK’s market cap in BTC’s terms

The Funding Rate on Binance was slightly positive, but this was not enough evidence for a rebound.

An uptick in buying volume on the OBV alongside increasing OI would be a good signal that BONK could rebound to the range highs.

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