Red alert: Bonk price could crash as whale selling intensifies

Bonk, the biggest Solana meme coin, continued its strong surge this week, reaching its highest level since December last year.

Bonk (BONK) token jumped to a high of $0.000040, up by over 343% from its lowest level this year. This surge occurred in a high-volume environment, with the 24-hour figure jumping to over $3.4 billion.

Bonk token’s rally coincided with that of other Solana meme coins. Fartcoin surged by over 23% in the last 24 hours, while Popcat, Cat in a Dog’s World, and Baby Doge Coin jumped by over 10%.

Most of these meme coins jumped enough that their combined market capitalization soared to over $15 billion, up from $6 billion a few months ago. The rally also mirrored the performance of Bitcoin (BTC) and other altcoins ahead of the GENIUS Act vote. 

Still, the token faces a few crucial risks. First, Nansen data shows that BONK supply on exchanges has been on a strong upward trajectory in recent months.

There are now over 23.13 trillion Bonk tokens on exchanges, up from a low of 21.1 trillion last month. The rising supply could signal that investors have started to book profits.

Second, data shows that whales have continued dumping the token this month. These investors now hold about 2.21 trillion tokens, down over 25% from the same period last month and much lower than last week’s high of 2.47 trillion tokens.

Whale selling is often a red flag because these investors are seen as being more knowledgeable than retail traders. They often dump their tokens before a major reversal.

Bonk price technical analysis

The daily timeframe chart shows that the token has been in a strong bull run this year. It jumped to a high of $0.000040 today, July 17, as the crypto bull run intensified. 

It has also retested the important 61.8% Fibonacci retracement level, where many reversals typically occur.

The risk, however, is that it has become highly overbought, with the Relative Strength Index jumping to the extreme overbought level of 82 and the two lines of the Stochastic Oscillator moving close to 100.

Additionally, there is a significant risk that Bonk may go through a mean reversion, as it has moved well above the 50-day and 100-day moving averages.

Therefore, the token may pull back in the coming days, with the next level to watch being $0.000025, the highest swing on May 12.