ambcrypto.com
The memecoin sector has been relatively quiet in recent days. According to CoinMarketCap data, the top 10 memecoins by market cap have moved less than 3% over the past week. There were only two exceptions, and one of them was Bonk [$BONK].
This highlighted the relative weakness of the $BONK memecoin. Compared to Bitcoin’s [$BTC] +2.9% performance over the past week, the meme sector was up by only 1.1%.
It showed that the sector, as a collective, didn’t show much spring in its step even as Bitcoin tried to rally beyond $65k.
Is market sentiment to blame for $BONK’s sudden losses?
The biggest South Korean crypto exchange, Upbit, confirmed the delisting of the $BONK pair, citing “numerous shortcomings and a potential for user harm”. Security incidents have weighed heavily on the public mind and also largely influenced Upbit’s decision.
The news came just over 12 hours ago, at the time of writing. In those hours, $BONK was down 14%. Coinalyze data showed an uptick in Open Interest during the trading sessions when $BONK prices were falling.
The 1-day chart reinforced the bearish long-term outlook. It also helped explain the enthusiasm of the bears. The swing structure has been bearish in recent months.
The 23.6% southward Fibonacci extension level at $0.00000287 has acted as support over the past three weeks. The Upbit delisting news catalysed a downward spiral.
The loss of an important short-term support must have spurred heightened speculative activity, worsening the sell pressure.
The potential for a dead cat $BONK bounce
$BONK has fallen below the long liquidations clustered below the $0.0000027 local support. Its descent in recent hours has been rapid, and a new cluster of short liquidations has built up around $0.0000026.
The lower $BONK goes over the weekend, the denser the magnetic zone overhead is likely to get. This will make a short squeeze more likely in the near term. Such a bounce into the $0.0000026-$0.0000028 former local support could offer an attractive selling opportunity.
A drop toward $0.0000012, the 61.8% extension level, could occur in case $BTC also faces a severe selloff.
Final Summary
- The Upbit delisting of $BONK pairs was based on a comprehensive consideration of factors, the centralized exchange announced.
- This news led to a 270% daily trading volume increase and a 12% price drop in just over 12 hours.