Early in the day, the price of BONK was bearish, reaching an intra-day low of $0.00002. However, a significant turnaround occurred following the announcement from the treasury proposing a massive burn of 84 billion tokens, which spurred a 10% increase in market value.
The announcement revealed that these tokens, amounting to the quarterly contribution from BONKBot to the DAO, would be permanently removed from circulation. This action is intended to reduce the overall token supply, which in turn boosted BONK’s market capitalization to $1,640,663,484, and elevated its trading price to $0.00002391.
This strategic move aims to enhance the token’s scarcity, potentially increasing its value over time. Such token burns have previously been well-received, as they tend to positively influence investor sentiment by reinforcing the asset’s value proposition.
The decision to burn tokens now lies with the BONK DAO community, as the proposal has been put to vote. All tokens locked on BonkRewards are eligible to participate in this and future community proposals.
Market analysts observed a 169% increase in trading volume, rising to $483,000,836 post-announcement, indicating renewed investor interest in BONK. Previous token burns, including a massive burn in April of 278.39 trillion BONK, have shown similar positive impacts on the token’s market dynamics, with community support robustly in favor.
Technical indicators on the BONK/USD price chart suggest a bullish momentum could continue. The Money Flow Index (MFI) is at 53.22, and the Moving Average Convergence Divergence (MACD) is positive, indicating increased buying pressure. The Relative Strength Index (RSI) stands at 57, supporting potential upward movement with a near-term target of $0.00003600 after demonstrating a double-bottom pattern on the 4-hour chart.
This token burn proposal, if passed, might set the stage for BONK to retest its all-time high of $0.00004704 from March, despite currently trading 49% below that peak.
