Buy Signal, Token Burn, Rally Ahead?

• TD sequential buy signal hints at BONK’s potential reversal next week
• BONK’s 2.025 trillion token burn may fuel a supply squeeze and price surge
• RSI near 30 suggests BONK is oversold, raising chances of a bullish rebound

Bonk (BONK) is hinting at a potential rebound after a sharp decline over the past week. Crypto analyst Ali Martinez has pointed out a bullish setup on BONK’s daily chart, suggesting that a price recovery may be coming. 

The TD sequential indicator, a common tool for spotting trend reversals, has flashed a buy signal, suggesting that the meme coin may be preparing for an upward move.

Chart Patterns and Price Targets

BONK’s latest price movement suggests the formation of a morning star pattern, a bullish reversal signal that could lead to recovery in the coming week. If this pattern holds true, the price could initially target the S1 pivot level at $0.000028. 

However, strong resistance at the psychological level of $0.000020 may act as a barrier to further gains. A breakout above this level could increase buying pressure, opening the door for a stronger uptrend.

Further supporting this view, Ali Martinez’s analysis shows that the TD Sequential indicator is signaling a short-term 4.41% intraday recovery, which could mark the beginning of a larger trend shift. If buying momentum holds, BONK may continue to move higher in the short term.

Related: Dogecoin, Bonk, and Pepe Set to Be Key Asset Allocations in 2025

Massive Token Burn: A Bullish Catalyst for BONK?

Another factor potentially boosting BONK’s price is the upcoming major token burn event. The official BONK team announced that 2.025 trillion BONK tokens will be burned in celebration of the BONK Dragon event and the 2025 Lunar New Year. The planned burn will take place after the completion of BIP No. 75 voting via the Realms program.

By reducing the overall token supply, this move could create a supply squeeze, potentially increasing BONK’s value. Historically, token burns have positively impacted asset prices by decreasing the available circulation and increasing demand. If investor sentiment turns positive, this burn event could be the fuel for further price appreciation.

Related: PENGU Flips BONK, Becomes Solana’s Largest Meme Coin

BONK’s Current Market Performance & Data

BONK is currently priced at $0.00001756, up 4.90% in the last 24 hours but down 30.21% over the past week. 

Its 24-hour trading volume is $144.85 million, while the circulating supply is 77 trillion BONK, giving it a market cap of $1.36 billion.

Derivatives Market Sentiment

As per Coinglass data, the derivatives market data shows a mixed sentiment. While BONK’s trading volume in derivatives has dipped by 0.51%, open interest has risen by 5.61% to $10.08 million. This suggests that more traders are opening new positions, pointing to a growing interest in the token.

From a technical standpoint, the Relative Strength Index (RSI) is near 30, signaling that BONK is approaching oversold territory. If the RSI starts to climb, a bounce could follow. 

At the same time, the MACD line remains below the signal line, indicating bearish momentum. However, the narrowing gap in the histogram suggests that selling pressure is weakening.