The short-lived rally in Solana-based meme coins has come to an abrupt end, with Bonk (BONK), Cat in a Dog’s World (MEW), and Book of Meme (BOME) ranking as the top assets leading the decline.
These tokens climbed in value on Wednesday but have since retraced and are now poised for an extended decline.
Bonk (BONK) Lingers Below Key Moving Average
Despite Wednesday’s rally in BONK’s value, its price remains below its 20-day exponential moving average (EMA), which measures its average trading price over the past 20 trading days.
When an asset’s price is below its 20-day EMA, it typically indicates a short-term downward trend. This means the average price over the past 20 trading days is higher than the current price. It suggests that buying pressure has weakened, and the asset’s price may continue to decline if selling pressure increases.
BONK’s negative Elder-Ray Index confirms the surge in selling activity. At press time, the meme coin’s Elder-Ray Index is -0.0000024.
This index measures the market’s buying and selling pressure. A negative value indicates that selling pressure outweighs buying momentum, signaling that sellers are in control and pushing the asset’s price lower.
If BONK bears remain in control, the token’s price may drop to $0.000020. If the low demand persists, the price may fall further to $0.000012, a level last witnessed in April.
Read more: How to Buy Solana Meme Coins: A Step-By-Step Guide
However, if sentiment shifts from bearish to bullish, the meme coin’s price may climb to $0.000025, invalidating the pessimistic projections.
Cat in a Dog’s World (MEW) Faces Weakening Uptrend
At press time, MEW trades at $0.0057. However, momentum indicators on the one-day chart suggest a weakening uptrend. For instance, its Aroon Up Line is down at 7.14%.
The Aroon Indicator tracks trends in an asset’s price and signals potential trend reversals. A declining Up Line suggests that the price is moving away from recent highs, reflecting a weakening uptrend. This means the asset may enter a consolidation phase or begin a downtrend.
While MEW’s positive directional indicator (+DI) is currently above its negative directional indicator (-DI), signaling stronger buying pressure, the Average Directional Index (ADX) at 20.22 suggests the uptrend is weak and the market could move sideways.
If selling pressure increases, MEW’s price could drop to $0.0046. However, if the uptrend strengthens and buying pressure spikes, MEW may rise to $0.006.
Book of Meme (BOME) Witnesses Negative Divergence
While BOME rallied to a peak of $0.0074 on Wednesday, its Chaikin Money Flow (CMF) remained negative, creating a bearish divergence. This indicator measures the flow of money into and out of an asset. Still negative at press time, BOME’s CMF is -0.34.
A bearish divergence occurs when an asset’s CMF is negative while its price increases. This signals that the price rally lacks strong buying activity and may be due for a correction. Traders often see this as a cue to exit long positions and consider taking short positions.
If BOME’s price witnesses a correction, it will revisit the five-month low of $0.0053, which it traded at during Monday’s market downturn.
Read more: BOOK OF MEME (BOME) Price Prediction 2024/2025/2030
However, an uptick in demand could push its price up to $0.011.
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