Bonk is facing great bullish prospects thanks to breaking out of the model and the token burning strategy.

Bonk (BONK) is currently trading at the $0.00002100 level on Monday afternoon, continuing the bounce back from the weekend and approaching a challenge of the (EMA) 200-day exponential moving average. The breakout above the falling wedge pattern, along with a strong wave of interest from the derivatives trading community, is igniting hopes for a prolonged bullish phase. Notably, the development team has also revealed plans to burn 1 trillion tokens when the number of holding wallets reaches 1 million, a move that promises to cut down the whales and create new attraction for retail investors.

Derivatives data shows increasing bullish expectations

According to data from CoinGlass, the open contract (OI) of BONK has increased by 9.53% in just the past 24 hours, reaching a level of 30.71 million USD. This development indicates that new capital is flowing strongly into Bonk's derivatives trading market.

Meanwhile, the funding rate is currently at 0.0105%, down from 0.0111% on Sunday. This slight adjustment reflects the optimistic sentiment of the derivatives trading community that is showing signs of stagnation. Notably, when the funding rate remains positive, the bulls are forced to pay additional fees to balance the prices between the spot market and the derivatives, as well as to compensate for the gap arising from leverage usage.

BONK derivatives data | Source: CoinGlass## The token burn plan may increase the demand for BONK

The number of wallets holding BONK on the chain is approaching 1 million, reflecting the rapid expansion of the community and marking a significant milestone. When this milestone is reached, the Bonk development team plans to burn 1 trillion tokens — equivalent to 1.23% of the current circulating supply of 81.06 trillion tokens.

In the cryptocurrency market, the move to cutting down the whales often acts as a catalyst, stimulating demand and can become an important driver for prices in the spot market.

Trend Reversal Signals

As of Monday afternoon, BONK continues to maintain its recovery momentum, increasing by an additional 3%, extending the previous session's 5.58% gain. This dog-inspired meme coin with a deflationary mechanism has completed the falling wedge pattern on the daily chart and has broken upward, approaching the 200-day EMA at $0.00002169.

If the candle closes successfully above this important EMA line, BONK could target the 50% Fibonacci retracement level at $0.00002350, measured from the peak of $0.00006230 on November 20, 2024, to the bottom of $0.00000886 on April 7. Conquering this level will open up opportunities for the coin to continue towards the 61.8% Fibonacci retracement level at $0.00002958.

BONK/USDT Daily Chart | Source: TradingViewTechnical signals are currently supporting the bullish trend. The MACD indicator shows the MACD line has crossed above the signal line, while the green histogram expands above the 0 mark, reflecting increasing buying pressure. The RSI index at 48 also indicates a recovery from the oversold region, gradually moving towards the neutral threshold – a sign that demand for BONK is improving.

However, a negative scenario could still occur if BONK fails to break through the 200-day EMA at $0.00002169. In that case, selling pressure may pull the price down below the psychological level of $0.00002000, negating the breakout signal and increasing the risk of returning to the support area of $0.00001520.

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