Solana’s ecosystem has been struggling recently, with memecoins being hit particularly hard. Falling revenues and trading volumes since their January peaks suggest the chain is in trouble. However, there are also signs of a turnaround, with its biggest memecoin, Bonk, seeing a strong recovery last week.
On Saturday, March 21, Bonk was up 20% over the past week, reaching a daily high of $0.00001291, after rising 10% that same day. This growth positioned it as the best-performing memecoin among the 100 biggest altcoins in that period.
This surge came after a significant improvement in Bonk’s short-term technical outlook. Notably, in the past few weeks, the token has been on a significant downtrend. However, a recent bounce from the monthly low of $0.000008967 indicated the start of a short-term recovery.
This recovery will largely depend on whether the token can break through key resistance. Notably, the current price of $0.00001261 is in the middle of a critical zone between 1.236 and 1.382 Fibonacci levels. If Bonk can push through its upper limit, currently at $0.000017, this would signal that the downward momentum is likely over.
Bonk Under Pressure From Solana Memecoin Slump
Still, this is a far cry from Bonk’s all-time high of $0.00005916 in November last year. At the time, a combination of exchange-listings and market optimism propelled its price, both conditions that are currently missing.
In the current market, further declines are more likely, with the next support at $0.00000888, or even the $0.00000569 level. This is partially due to a broader pressure on Solana’s ecosystem. Since January, Solana has seen a 93% drop in its network revenues and a significant drop in volumes.
Volumes dropped from $80 billion at their peak in January to $28 billion in March, fueled in part by a decrease in bot traffic. What is more, high-profile memecoin scandals, such as the Libra token, and questions surrounding the Trump and Melania tokens also contributed to skepticism.
The resulting collapse in retail interest is bad news for Solana, and consequently Bonk, at least in the short term.
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