Amid a broader market consolidation, Bonk has slumped 8.4%, currently priced at $0.00001219.
However, traders remain bullish on Solana meme coins. Indeed, the newly launched Smog token captured Bonk’s liquidity, climbing to a $34 million market cap in its opening week.
Bonk Risks Further Downside As It Approaches Critical Level
The meme coin market is highly compelling, drawing volatile swings in both directions. This is reflected in Bonk’s recent price action, being one of the top performers last week. Subsequently, pumping over 20% in one day but selling off 8.4% today.
But the selloff raises concerns as Bonk nears a key structural level, which could result in a deeper retracement.
The chart below shows Bonk is falling to its mid-range between long-term support and a recent high. However, with little structural levels between the mid-range and support, a break below indicates bearish momentum.
Consequently, Bonk’s near-term trajectory hangs on its response to the current level.
Bonk’s earlier upward move followed an announcement that holders can now lock their tokens to earn rewards through an Armada-led initiative.
However, Coinglass derivatives data shows that Bonk’s open interest has fallen by 19% today, with $271K of longs liquidated compared to $45K of shorts. Meanwhile, its funding rate has also fallen.
This illustrates that the market may have become overly confident following the announcement, leading to more leveraged buy orders, which created a cascading effect once Bonk found resistance.
Nevertheless, with the crypto market on the brink of a bull rally, analysts remain bullish about Bonk’s mid-term trajectory.
According to TradingView analyst The Trading Wizard, Bonk could explode to $0.000033 after breaking a descending triangle in the 4-hour time frame.
The analyst explained, “BONKUSDT finally broke the descending triangle after almost two months of consolidation. The ideal would be for the price to retest and continue its upward movement, I am bullish with altcoin season coming.”
However, with Bonk currently approaching a critical level, it is important to remain aware of the downside risk.
This is why many meme coin traders take a diversified approach. But as well as managing risk, diversification also provides exposure to more projects that could explode.
In recent days, a prominent Bonk alternative has emerged called Smog. The token soared after launching on Solana last week but has raised eyebrows after announcing it will go multi-chain, also launching on Ethereum.
Smog Airdrop and 42% Staking APY Draw Massive Interest and $34M Market Cap
Despite being less than one week into its journey, Smog already holds a respectable $34 million market cap.
While this presents significant room for growth, it also differentiates the project from most meme coins which have lower market caps, presenting higher volatility risk.
Smog got off to a roaring start following its launch, which coincided with an airdrop announcement. The Solana network has recently become a hotbed for airdrops, so it is no surprise that Smog received a warm welcome.
Currently, the token boasts over 11K holders and 21K followers on X.
According to its website, 35% of the token’s total supply is earmarked for the airdrop, with 50% going towards marketing efforts, 10% to CEX launches, and 5% towards DEX liquidity.
In a more recent announcement, the team explained that Smog is launching on Ethereum via the Wormhole cross-chain protocol.
This marks a significant innovation, bolstering Smog’s potential to attract liquidity.
The Ethereum version also has a staking mechanism, offering a 42% APY. Users can purchase the ERC-20 version from the Smog website or the Solana version from a DEX like Jupiter or Birdeye.
Solana Smog holders who want to stake their tokens should bridge them to Ethereum using Portalbridge.com and then deposit them on the Smog website.