- BONK short-term holders were at a massive loss due to the relentless downtrend
- A recovery was not in sight, and leading memes needed to lead the sector’s recovery
The memecoin market has performed abysmally in the past month, and Bonk [BONK] was in a steady downtrend.
Data from the crypto data platform Artemis showed that a sector performance in crypto over the past month placed memes as some of the worst performers.
Source: Artemis
The memes have seen a 41% drop in the fully diluted market capitalization. The average performance in the past month was -30.2%, and Bitcoin [BTC] was at -19.2%.
The meme sector was at -41.5%. Hence, it isn’t just that BONK was firmly bearish — the whole memecoin sector was.
Price expectations for BONK — Bears still in control
Source: BONK/USDT on TradingView
Bonk was caught in an intense downtrend in recent months. After the swift gains in November, the bulls have been unable to hold key support levels for long. This saw BONK fall below the November lows in early February.
At press time, BONK was another 23% down and has retested the April 2024 support. There was no guarantee that the price would not dip lower. Traders and investors must expect the downtrend to continue.
Highlighted by the white box was a fair value gap that extended to $0.0000155. Hence, it was possible we would see a 15% price bounce in the coming days before the downtrend gains traction once more.
Source: Glassnode
The short-term holder net unrealized profit/loss (STH NUPL) showed that short-term holders were at an extreme loss. The NUPL value was at -1.22 and had fallen to -1.35 on the 24th of February.
The last time the NUPL was this low was back in April 2023. Subsequently, a price bounce occurred, but we can not claim causation here.
Rather, the inference was that the extremely low NUPL does not guarantee the end of a downtrend.
In October 2023, Dogecoin [DOGE] rallied from $0.056 to $0.092 in December 2023. This coincided with a BONK rally of nearly over 100x.
It was possible that a DOGE rally, alongside the rest of the memecoin market, could come alongside a BONK recovery. Until conditions change, traders should expect bears to remain dominant.