Shiba Inu-themed BONK sees strong demand – Why?

  • BONK has rallied to its highest price point in 11 months.
  • The surge came after the project introduced single-sided staking.

Shiba Inu-themed token Bonk [BONK] has rallied to its highest level since the 5th of January following the introduction of single-sided staking on the project’s liquidity pools.

On 2nd November, the “Solana Dog Coin” announced the launch of single-sided liquidity pools wherein its users can provide liquidity to the platform using a single asset.

This is in contrast to traditional liquidity pools, which require users to provide two assets in a specific ratio.

The launch of this liquidity pool resulted in new money entering the Solana [SOL] ecosystem as the Layer 1 (L1) blockchain network has seen its decentralized finance (DeFi) total value locked (TVL) grow by almost 10% in the last week, data from DefiLlama showed.

The launch of the pool, in addition to the general market rally, has also led to an uptick in new demand for BONK, whose value has increased by 250% since the pool went live, data from CoinMarketCap showed. 

Source: CoinMarketCap

BONK follows a clear trend

At press time, the meme coin exchanged hands at $0.000002243, still in an uptrend. Confirming the upward price trend, the token’s Accumulation Distribution Line (ADL) was north-bound as of this writing.

The ADL measures the underlying supply and demand of an asset, and it does this by determining whether traders are actually buying or selling the asset. During periods of strong uptrend or downtrend, the ADL moves in the same direction as the price, confirming the current trend.

At -5.39 trillion at the time of writing, BONK’s ADL has trended upward with its price since the price growth began in mid-October. 

Another indicator confirming the BONK market’s clear trend was its Aroon Indicator. Its Aroon Up Line (orange) was spotted at 100% at press time. When an asset’s Aroon Up line is close to 100, it indicates that the uptrend is strong and that the most recent high was reached relatively recently.

Likewise, BONK Aroon Down Line (blue) was 0% at the time of writing. This suggested that the alt’s most recent low was reached long ago.

Read Bonk’s [BONK] Price Prediction 2023-24

It is, however, key to note that momentum indicators Relative Strength Index (RSI) and Money Flow Index (MFI) returned overbought values of 91.56 and 87.53, respectively, at press time. 

Buyer exhaustion is common at these RSI and MFI levels; hence, a price correction might be imminent.

Source: BONK/USDT on TradingView

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