Key Takeaways
Bonk (BONK) has been consolidating in a descending channel after a strong, impulsive rally.
The daily chart suggests that BONK is nearing the end of a corrective structure, while the hourly chart indicates a potential short-term breakout scenario.
Key Fibonacci retracement levels and RSI signals provide crucial insights into upcoming price movements.
The BONK daily chart illustrates a classic Elliott Wave correction following its strong impulse rally to the all-time high of $0.00005911 on Nov. 20 last year.
The corrective phase has taken the form of a descending channel, with the price retracing slightly below the 0.786 Fibonacci level, which has acted as a key support area.
It reached a low of $0.00002279 on Jan 29 and did so in a five-wave manner, which could have been the completion of the WXYXZ correction count.
The Relative Strength Index (RSI) on the daily timeframe remains neutral territory, indicating neither overbought nor oversold conditions.
However, previous tests of the 0.00002779 level have resulted in rebounds, suggesting buyer interest in this zone. If BONK maintains above this critical level, it could signal the end of the correction phase.
The descending wedge pattern suggests that a breakout may be imminent, but confirmation is required with volume expansion.
The lower time frame (1-hour) chart suggests an early-stage five-wave impulse forming, following a potential corrective bottom at $0.00002279.
The price action has already established waves (i) and (ii), with an expected wave (iii) breakout towards the descending trendline resistance at $0.000030.
If wave (iii) extends further, the next major resistance would be at $0.000033, aligning with the 0.618 Fibonacci retracement.
However, a rejection at this level could result in a wave (iv) pullback before an eventual wave (v) breakout above the larger descending structure.
An alternative scenario would be a rejection at $0.00002635 (0.786 Fibonacci), leading to another test of the $0.00002279 support.
A breakdown from this level would confirm a further bearish continuation toward $0.00001744.
The RSI on the hourly chart shows an early bullish divergence, which supports the probability of an upward move.
However, sustained momentum and volume confirmation are needed to validate a breakout.
A confirmed move above $0.00003790 would indicate a trend reversal, while a failure to hold $0.00002279 could extend the corrective phase.