BONK Dips 10% In 24 Hours, What’s Going On?

Although the drop was part of a broader market-wide correction, intensified profit-taking behavior by short-term traders exacerbated the situation. However, some key indicators suggest the bearish momentum may be temporary.

BONK’s Market Position Contracts As Traders Exit

Over the past 24 hours, BONK has seen a dramatic contraction in its market position, primarily driven by trader exits. The Open Interest (OI), a key metric that reflects the total number of active positions, fell by nearly 20%, settling at $27.8 million, according to data from CoinGlass.

Source: CoinGlass

This sharp decrease indicates that a substantial number of positions were liquidated, signaling a shift in market sentiment during this sell-off period. Liquidation data further reinforces this narrative.

A total of $95,370 in BONK positions were wiped out, with long traders suffering the majority of losses. Out of the total, $74,230 came from long-side liquidations, pointing to a rapid shift toward bearish dominance.

Despite this bearish pressure, the current market structure still leaves room for a possible rebound.

Could Declining Selling Pressure Signal A Reversal?

One of the more promising signs for BONK is the drop in trading volume. Over the past 24 hours, the trading volume plunged by 41.91% to $77.18 million.

Typically, a significant decline in volume accompanying a price drop may indicate waning selling pressure. This suggests that the downward momentum might be slowing, as sellers lose steam and fewer traders are willing to offload BONK at lower prices.

Interestingly, spot traders appear to be going against the broader sentiment. According to CoinGlass, spot buyers have accumulated approximately $4 million worth of BONK, transferring these tokens into cold storage wallets.

Source: CoinGlass

This trend implies a long-term bullish outlook, as moving tokens off exchanges often signals holders’ intent to retain assets rather than trade them in the short term.

Should this accumulation trend persist, it may lead to a supply squeeze, a condition where exchange reserves drop while demand continues to rise. Such a scenario could set the stage for a potential market rally.

Derivatives Market Still Shows Bullish Undercurrents

Despite the fall in Open Interest, BONK’s derivatives market still holds bullish potential. One critical metric reinforcing this sentiment is the Open Interest Weighted Funding Rate, which currently sits at a positive 0.0029%.

A positive funding rate generally suggests that long positions continue to outweigh shorts, even as the overall leverage in the market adjusts downward.

While the funding rate is on a slight downtrend, its continued presence in positive territory means BONK still resides within a bullish market framework, at least for now.

BONK Bears Have The Upper Hand, But Not For Long?

While BONK has faced substantial short-term pressure due to profit-taking and wider market turbulence, several on-chain and market indicators paint a more nuanced picture.

From declining trading volumes (hinting at exhausted sellers) to long-term accumulation by spot traders and a still-bullish derivatives structure, BONK may be setting up for a potential reversal.

Traders and investors should watch closely for signs of continued accumulation and further reductions in exchange reserves. If those trends strengthen, BONK might see renewed bullish momentum in the coming days or weeks.