Next few days could be very critical to BONK’s price action.
- BONK has retraced part of its July recovery gains Fed rate decision could drive a relief rally, but there seemed to be an overhead obstacle
BONK had a mixed bag of a performance in July. It jumped by +50% in the first half, rallying from $0.00002 to $0.000034. Later however, it erased part of its monthly gains, with its retracement extending to $0.000026 at press time.
The pullback cleared a key support, dropping the memecoin into a familiar range seen in Q2. Interestingly, even the short-term price trend, the 20-day SMA (Simple Moving Average) was breached, suggesting sellers had the upper hand.
However, on the back of the FOMC’s (Federal Open Market Committee) announcement, volatility might be expected. Can the Fed rate decision offer a relief rally?
Will FOMC boost BONK?
Source: BONK/USDT, TradingView
The market expected the Fed rate to remain unchanged in July’s decision, with high odds of a September rate cut. A dovish FOMC could offer BONK bulls a chance to reverse higher. In such a case, 9% gains could be likely if BONK hits the immediate resistance at $0.000028.
However, any hawkish comments from the Fed chair could have dented the September rate cut expectations and dragged BONK even lower. In such a hawkish scenario, a retest of the previous range low and bullish order block (marked cyan) above $0.000020 might have acted as a support.
The demand zone could offer a nice discounted entry position for sidelined bulls eyeing any upside potential, especially if Bitcoin [BTC] re-targets its range-high of $70k.
The neutral readings on the RSI (Relative Strength Index) and CMF (Chaikin Money Flow) further reinforced the’ calm before a storm’ narrative – A sign that buying and capital flows were flat.
BONK market sentiment was positive
Source: Santiment
Interestingly, despite the price retracement, the market sentiment was overly positive over the past few days. This suggested that market players expected some upside potential for the memecoin.
This outlook was further supported by traders’ positioning on the Futures market. As of press time, 59% of BONK Futures positions were leveraged longs, underscoring that more players were going long on the memecoin, perhaps to catch an FOMC-induced rally.
Source: Coinglass
Nevertheless, the $0.000028 resistance remains crucial. BONK could head lower if the expected recovery doesn’t clear it.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
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