With his disruptive price performance, Bonk, the hero of the Solana ecosystem and the 2023 bull run, is taking investors by surprise. Market investors are both fascinated and wary about the causes for this surprise gain since BONK has exhibited signs of a positive recovery after losing nearly 65% of its value in the previous month.
Whale investors’ calculated move is one tenable reason for BONK’s price rebound. These investors are actively purchasing, maybe with the intention of dollar-cost averaging (DCA) their holdings. To lessen the impact of volatility on the entire purchase, an investor might use the dollar-cost averaging approach, which involves dividing the total amount to be invested among periodic purchases of a desired asset. The whales’ behaviour indicates that they think BONK will have a significant turnaround, which would help them offset the significant losses they have incurred as a result of the recent price decline.
The token’s price started to steadily rise after experiencing a sharp high and subsequent collapse. As whales gather more tokens in expectation of a market recovery, this price fluctuation may be a harbinger of strong purchasing pressure at lower price points.
During a bearish period, averaging down might be a high-risk, high-reward approach. Proper timing enables investors to reduce their average cost per token and perhaps increase their gains in the event of a comeback. Retail investors, who frequently read signals in the activities of larger investors, may become more interested in BONK as a result of the whales’ confidence.
It is crucial to remember that these kind of recoveries can be brittle, particularly during a down market era. Avoid placing any large bets on an asset that is so volatile since it may continue to decline in the near future.
