- The Solana-based meme token BONK has reached an all-time high.
- Last week’s rally was accelerated by the listing on KuCoin.
Shiba Inu themed Token Bonk [BONK] has risen to a record high. This follows the token’s listing on cryptocurrency exchange KuCoin in late November.
Exchanging hands at $0.0000125 at the time of writing, the price of the dog-themed crypto asset has risen 200% in the last seven days. According to CoinMarketCaps data, BONK ranked as the crypto asset with the most gains in the past week.
The sharp demand for BONK results in greater volatility
With many expecting a manifestation of the “Coinbase effect” following the KuCoin listing, BONK has seen a significant increase in demand over the past week.
Readouts of the token’s price movements showed a sharp increase in key momentum indicators since December 4.
At the time of writing, BONK’s Relative Strength Index (RSI) and Money Flow Index (MFI) were at overbought highs of 87.32 and 94.63 respectively.
While these values showed that buying pressure was greater than the token distribution, buyer exhaustion is common at these levels. This is because buyers typically find it difficult to sustain further price increases. Therefore, price disadvantages are generally expected at these highs.
The sudden increase in demand for BONK and subsequent price increase have led to an increase in market volatility.
AMBCrypto found that the gap between the upper and lower bands of BONK’s Bollinger Bands (BB) has been steadily widening over the past week.
A gradual widening of this range generally indicates an increase in market volatility. The coin’s Bollinger Bandwidth, which has since grown, confirmed the increasing volatility.
Additionally, BONK was trading above the upper band of its BB indicator at the time of writing. When the price of an asset trades above this range, it means the asset may need a correction.
This is because the higher than average prices are considered unsustainable in the short term.
How many Worth 1,10,100 BONKs today?
Another indicator that pointed to increasing volatility was BONK’s Average True Range (ATR).
This indicator measures market volatility by calculating the average range between high and low prices over a certain number of periods. BONK’s ATR has been on an upward trend since December 5.
Source: TradingView
