- Bonk token has crashed by more than 60% from its 2023 highs.
- It has entered the markdown phase of the Wyckoff Method.
- Other Solana tokens like Orca and Samoyedcoin have also retreated.
Bonk price has pulled back sharply in the past few weeks as the recent momentum faded. After peaking at $0.000035 on December 15th, the meme token has dropped by more than 60% to the current $0.000014. This retreat has brought its total market cap to over $830 million.
Why is Bonk token falling?
Bonk is going through a major correction as demand for Solana tokens ease and as traders start taking profits. A closer look shows that most Solana coins that surged in December have started falling in the past few weeks.
Orca, the biggest DEX in Solana, saw its token plunge by over 32% from the highest point in 2023. Similarly, tokens like Samoyedcoin (SAMO), Solend, Raydium, and Helium have also pulled back.
This price action is mostly because of profit-taking among investors. In most cases, cryptocurrencies and other assets tend to go through a correction after going parabolic for a while.
Technically, this situation has been explained through the Wyckoff Method, which highlights the different phases that assets go through. In this case, Bonk went through the accumulation phase between March and October when it made no major moves.
It then entered the markup phase, which is characterized by higher demand than supply. In December, it moved to the distribution and the markdown phase. The latter one happens as many investors start selling their holdings.
The distribution and markdown phase is crucial for a cryptocurrency like Bonk because it has no utility. Instead, like other meme coins, it is held by day traders hoping to make a killing as its price rises.
Bonk price forecast
The daily chart shows that the BONK token price has pulled back in the past few weeks. It has entered into a deep bear market as it moved to its distribution and markup phase.
Along the way, BONK has remained above the 50-day and 100-day Exponential Moving Averages (EMA). This is a positive move since it shows that there are still some bulls left in the market.
The Relative Strength Index (RSI) has crossed the neutral point at 50 while the Stochastic Oscillator has dropped to the oversold level. Therefore, I suspect that the token will soon bounce back as traders attempt to retest the all-time high of $0.000035. This target is about 158% above the current level.
This price action is a relatively common one, especially when assets are forming a double-top pattern.
