BONK Prepares for a Drop as Meme Coin Craze Subsides

BONK Prepares for a Drop as Meme Coin Craze Subsides
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BONK price will likely witness a bearish outcome as the meme coin craze is seemingly ending. 

The enthusiasm among meme coin holders is declining rapidly, which is visible in their actions.

BONK Investors Pull Back 

BONK’s price enjoyed its holders’ optimism, but as the macro conditions turn unfavorable for the crypto market, this optimism seems to be fading away. This is clearly evident in the weighted sentiment of all BONK investors.

This metric combines and analyses all the mentions and expressions pertaining to a topic. The data helps to provide a more nuanced view of public opinion or investor sentiment. Upticks suggest bullishness, while downticks hint at bearishness.

In the case of BONK, the investors’ sentiment, which turned bearish at the beginning of the month, is intensifying. 

BONK Weighted Sentiment. Source: Santiment

The impact of this intensifying skepticism is visible in the meme coin’s funding rate. The funding rate is a periodic payment exchanged between traders in a contract to keep the contract price aligned with the spot price. 

It reflects the difference between perpetual futures prices and spot prices, where a positive rate indicates a bullish market, and a negative rate indicates a bearish market. Generally, positive rates suggest the dominance of long contracts over short ones and vice versa.

BONK, while maintaining a positive funding rate, is noting a decline. This shows that traders are liquidating and pulling out long contracts. 

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BONK Funding Rate. Source: Coinglass

As the price drops further, it won’t be surprising to see the funding rate become negative.

BONK Price Prediction: Keeping Above a Key Support

BONK price is holding above the critical support of $0.00002748, a level that has been tested as support and resistance. The chances of a decline below this line are significant, and the meme coin could thus fall to $0.00002153.

The aforementioned conditions do hint at a further decline, although $0.00002000 will act as a support floor. This will potentially prevent BONK from falling any lower.

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BONK Price Analysis. Source: 

But if the broader market conditions improve, BONK could capitalize on it and bounce back. Should the breakdown fail or the meme coin recover mid-way, a recovery to $0.00003000 is on the cards. Breaching the same would invalidate the bearish thesis.

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