The recent sell-off of BONK has raised concerns among investors, but with bullish signals emerging, a quick recovery may be on the horizon.

Due to profit-taking triggering a significant market correction, BONK has dropped by 10%.

The decline in trading volume, decrease in spot demand, and overall active activity positively indicate that prices will rebound quickly.

Bonk [BONK] has dropped significantly by 10% in the past 24 hours, falling to $0.00002208 as of the time of writing. Although this drop is part of the overall volatility in the cryptocurrency market during this period, profit-taking traders have intensified market fluctuations, indicating that bearish indicators may only be temporary.

As traders sell off BONK, the position size is being reduced.

In the past 24 hours, the position size of BONK in the market has significantly decreased. As of the writing of this article, the open contracts measuring position size have decreased by about 20%, to $27.8 million.

This decline indicates that many positions were closed due to market sentiment turning unfavorable for long traders. Liquidation data showsthat a total of $95,370 in positions were closed, with long traders bearing the majority of the losses. In fact, over 50% of recorded losses came from long traders, totaling $74,230.

Although the market currently favors short traders, there are signs that bullish sentiment is beginning to re-emerge.

What does the weakening of selling pressure mean?

From the analysis of market trading volume, it appears that selling pressure may be weakening. The 24-hour trading volume has decreased by 41.91% to $77.18 million, with prices falling accordingly.

The sharp decline in trading volume, coupled with the price drop, indicates that the selling momentum is weakening, suggesting insufficient momentum for a continued downtrend. Encouragingly, spot traders in the market have been actively buying BONK during this period.

Currently, this group of traders has accumulated $4 million worth of BONK and transferred it to private wallets. This transfer from exchanges to long-term storage indicates optimism about BONK's potential.

If this trend continues, the reduction in foreign exchange reserves could lead to supply tightness, thereby driving demand and potentially triggering a significant rebound in the BONK market.

Additionally, COINOTAG found that despite the decrease in open contracts, the overall sentiment in the derivatives market remains bullish.

Despite the decrease in open contracts, the weighted funding rate of open contracts remains at a positive 0.0029%. This indicates that even with adjustments in leverage, long positions still dominate. Although this indicator shows a downward trend, its positive value at least currently maintains BONK's position in a bullish market structure.

In summary, although BONK has experienced significant sell-offs, the weakening of selling pressure and the key indicators of increased spot demand suggest that prices may rebound. As market conditions change, traders and investors should remain vigilant for signs of recovery and remember that position balances can shift rapidly in a dynamic cryptocurrency landscape.