BONK Token Burn Fails to Spark Rally, Still 70% Below Peak

Key Takeaways

• BONK plans to remove 2 trillion tokens from circulation and increase scarcity.
• However, the memecoin price remains range-bound in a descending channel.
• BONK’s price could see another correction unless momentum becomes bullish.

The Bonk team announced plans to burn 2.02 trillion tokens via its official X handle. This development comes days after BONK’s price crashed due to political tensions around the U.S. trade war with other nations.

Earlier in the week, BONK’s price fell to $0.000016. While it has slightly bounced to $0.000018, this analysis shows that it is unlikely to recover fully anytime soon.

Bonk Reveals Plans to Reduce Circulating Supply

Burning tokens involves permanently removing them from circulation, which reduces the total supply. Like some other projects, the memecoin team has frequently employed this BONK burn process as a strategy to help increase the scarcity of the cryptocurrency and, in turn, drive the price higher.

Today, at exactly 3:26 AM UTC, BONK disclosed that it will burn 2.02 trillion tokens. The project revealed that the token burn mechanism is being used to mark the conclusion of the BONKDragon event.

Additionally, it will celebrate the 2025 Lunar New Year, which is also the Chinese New Year.

“As a part of the BONKDAO commitment to sustaining tokenomics, the council has identified 2.02 trillion BONK as the next burn event, celebrating the end of the BONKdragon campaign and the 2025 Lunar New Year,” It stated .

Still, the Memecoin is Stuck

However, the BONK burn disclosure failed to impact the memecoin’s price in any way, as it keeps hovering around $0.000018. BONK’s price has dropped by 28.73% in the last seven days.

The current price also means that BONK is down 70% from its all-time high. On the 4-hour chart, this price decline has kept the token stuck in a descending channel.

As seen above, BONK consistently made lower highs and lower lows, creating two parallel descending trendlines. This pattern indicates that the memecoin is in a downtrend, as each trendline fails to rebound toward the previous highs.

Should this remain the case, BONK might remain range-bound between $0.000016 and $0.000019.

BONK Price Outlook Remains Bleak

A look at the daily chart shows that BONK is trading within a descending triangle with the support line at $0.000018. This pattern indicates that sellers are more aggressive as demand for the memecoin remains weak.

In addition, the Moving Average Convergence Divergence (MACD) has declined to the negative region, which indicates bearish momentum.

Should BONK fail to rise above the triangle’s upper trendline, the memecoin’s price might plunge to $0.000012.

On the contrary, BONK’s price might evade another decline if momentum becomes bullish. However, this would also require increased demand for the cryptocurrency.

If that happens, the BONK price might rally toward $0.000030. But to validate this reversal, BONK first has to flip the resistance at $0.000023.