- The Solana-based meme token BONK has clinched an all-time high.
- Its rally in the last week was precipitated by its listing on KuCoin.
Exchanging hands at $0.0000125 at press time, the price of the dog-themed crypto asset has increased by 200% in the last seven days. According to CoinMarketCap’s data, BONK ranked as the crypto asset with the most gains in the last week.
Sharp demand for BONK results in increased volatility
As many expect a playout of the “Coinbase effect” following the KuCoin listing, BONK has seen a significant surge in demand in the last week.
Readings from the token’s price movements showed a sharp uptick in key momentum indicators since 4th December.
At press time, BONK’s Relative Strength Index (RSI) and Money Flow Index (MFI) were spotted at overbought highs of 87.32 and 94.63, respectively.
While these values showed that buying pressure exceeded token distribution, buyers’ exhaustion is common at these levels. This is because buyers typically find it hard to sustain any further price rally. Hence, price drawbacks are usually expected at these highs.
The sudden increase in the demand for BONK and its subsequent price rise has resulted in the growth of market volatility.
AMBCrypto found that the gap between the upper and lower bands of BONK’s Bollinger Bands (BB) has widened steadily in the last week.
A gradual widening of these bands typically indicates an increase in market volatility. The coin’s Bollinger Bandwidth, which has grown since then, confirmed the rising volatility.
Also, BONK traded above the upper band of its BB indicator at press time. When an asset’s price trades above this band, it means that the asset may be due for a correction.
This is because the higher-than-average prices are considered unsustainable in the short term.
How much are 1,10,100 BONKs worth today?
Another indicator that hinted at growing 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 specified number of periods. BONK’s ATR has trended upward since the 5th of December.