Bonk price declines as suppressed funding rate and open interest weigh on sentiment

• Bonk price extends decline 41% from its July peak, testing support at $0.00002345.
• $BONK futures funding rate and Open Interest edge lower, reflecting risk-off sentiment.
• A Death Cross pattern and a MACD sell signal in the 4-hour time frame highlight a deteriorating technical structure.

Bonk ($BONK) is facing increasing selling pressure, down over 1% on Wednesday to trade at around $0.00002405 at the time of writing. The Solana-based meme coin turned bearish after posting the largest monthly return this year of 79.6% in July.

$BONK’s rally, which was primarily driven by community sentiment due to key ecosystem developments, peaked at $0.00004074. However, the sticky risk-off sentiment in the broader cryptocurrency market and headwinds due to profit-taking have seen the price of Bonk drop 42% from July’s peak.

Bonk edges lower amid suppressed funding rate and Open Interest

Bonk’s bearish outlook could be attributed to a shaky derivatives market, characterized by low futures funding rates and a declining Open Interest (OI). According to CoinGlass data, $BONK’s weighted funding rate, which shows the level at which traders are leveraging long and short positions, averaged at around 0.0052% after peaking at 0.0256% on July 23.

Low funding rates indicate that the fewer investors are leveraging long positions, depriving the price of bullish momentum to drive the uptrend.

Bonk Futures Funding Weighted Funding Rate | Source: CoinGlass

As for the OI, which refers to the notional value of outstanding futures or options contracts, its decline has persisted since its July peak of $73.4 million. CoinGlass data shows the OI averaging at around $39 million at the time of writing, marking a 47% decline in less than three weeks.

If the Open Interest stabilizes and starts to rise again, interest in $BONK could surge and support the anticipated recovery. Still, traders should be aware of the prevailing risk-off sentiment amid the anticipated impact of higher tariffs and the Federal Reserve (Fed) holding interest rates steady.

Bonk Futures Open Interest | Source: CoinGlass

Technical outlook: Bonk holds critical support

Bonk price holds above support at $0.00002345, tested for three days since Monday. Technically, sellers have the upper hand, especially with the Moving Average Convergence Divergence (MACD) indicator maintaining a sell signal, triggered on Tuesday when the blue line crossed below the red signal line on the 4-hour chart below.

A Death Cross pattern, formed when the 50-period Exponential Moving Average (EMA) crossed below the longer-term 200-period EMA on Wednesday, underscores the bearish outlook. This pattern suggests that bearish sentiment is apparent, predisposing $BONK to decline further if bulls fail to take control of the trend.

$BONK/USDT 4-hour chart

Another daily close above support at $0.00002345 would imply that selling pressure is fading, which will likely boost interest in $BONK. Key areas of interest for traders are the next key resistance at around $0.00002739 and support at $0.00001971, tested on July 9.