BONK plummets 18% as memecoin collectively weakens, is the risk of further decline not over?

BONK has signaled a positive structural shift during the first week of January. The initial breakout sparked high expectations, but the momentum quickly weakened and could not sustain the upward trend.

Currently, BONK ranks 6th among memecoins by market capitalization.

According to data from CoinMarketCap, the entire memecoin sector experienced a week of intense pressure. The total market cap dropped by 15.47%, with BONK experiencing a deeper correction of 18.77%.

Meanwhile, the leading memecoin, Dogecoin (DOGE), also followed the overall trend, declining 14.5% during the same period.

BONK’s rally is just a short-term rebound within a long-term downtrend

Daily BTC/USDT Chart | Source: TradingView As mentioned, the bullish breakout occurred in early January when BONK surpassed the trend’s pivot point at $0.0000103. This momentum quickly pushed the price up to $0.0000134, but the enthusiasm was short-lived. BONK soon weakened and retraced for most of the remaining month.

In this context, Bitcoin (BTC) repeatedly failing to hold the $94,500 level over the past two weeks indicates that selling pressure still dominates the market. BONK is no exception, facing significant selling volume. As a result, the OBV indicator plummeted, breaking below December’s lows, thereby extending the downtrend that has been in place since August with no signs of an early reversal.

The road ahead for BONK

Source: CoinGlass Liquidation clusters around $0.0000074 have been officially “swept clean.” Conversely, notable liquidity absorption zones are forming at $0.0000090 and $0.0000095.

In the short term, BONK may experience a technical rebound toward these liquidity zones. However, given the current market conditions, the likelihood of a strong recovery reaching these higher price levels remains quite limited.

Action signals for traders – Short-term rebound expected, then reversal to downside

Hourly BTC/USDT Chart | Source: TradingView The 1-hour price chart is signaling a less optimistic outlook, putting traders on the defensive. Based on the most recent downward momentum, the key Fibonacci retracement levels at $0.00000755 – $0.00000785 are emerging as critical support zones.

In the short term, BONK might undergo a technical correction to test these resistance levels before resuming its decline. This could be an opportunity for traders to consider selling according to the trend.

If selling pressure continues to dominate, the next correction could target the local bottom around $0.0000064, with the possibility of prices falling further to $0.0000060 and $0.0000053.