BONK crashes after $20M DAO exploit: is a deeper selloff coming?

Bonk BONK remained under pressure on Tuesday, extending losses after a sharp decline triggered by a major security breach at BonkDAO.

The Solana-based memecoin was trading below $0.0000045 after dropping more than 10% in the previous session, as investors reacted to news that approximately $20 million (approx. AED 73.5 million) worth of BONK tokens had been stolen from the DAO's treasury through a malicious governance proposal.

The exploit has dented market confidence and raised concerns about additional downside if the stolen tokens are sold on the open market.

Malicious governance proposal drained BonkDAO treasury

According to Bonk's official X account, attackers successfully pushed through a fraudulent governance proposal, enabling unauthorized access to the BonkDAO treasury.

The exploit resulted in the theft of an estimated $20 million (approx. AED 73.5 million) in BONK tokens, marking one of the largest governance-related attacks to impact the project.

During its investigation, BonkDAO said it identified exchange wallets used to accumulate BONK before the proposal was submitted, suggesting the exploit may have been carefully planned.

The project added that it is coordinating with cryptocurrency exchanges, Blockchain bridges, the Solana Foundation, and law enforcement agencies.

The goal is to track the stolen assets, recover funds where possible, and identify those responsible for the attack.

Although the initial market reaction has already pushed BONK sharply lower, investors remain concerned about the fate of the stolen tokens.

If the attacker transfers the assets to centralized exchanges and begins liquidating them, the additional supply could place renewed downward pressure on BONK's price.

Until there is greater clarity regarding the movement of the stolen funds, traders may remain cautious toward the memecoin.

Bonk technical outlook: 50-day EMA caps recovery

The BONK/USD 4-hour chart is bearish and efficient as the meme coin has lost 9.5% of its value in the last 24 hours. 

BONK's technical outlook has weakened after the token failed to sustain a move above a key resistance level.

The memecoin was rejected at its 50-day Exponential Moving Average (EMA) near $0.0000048 on Monday before falling more than 9%.

At the time of writing, BONK continues to trade below $0.0000043, leaving sellers in short-term control.

If bearish momentum persists, BONK could decline toward its June low near $0.0000039, which represents the next significant support zone.

A break below that level could expose the token to further downside if selling pressure accelerates.

Technical indicators currently present a mixed outlook.

The Relative Strength Index (RSI) sits around 37, below the neutral 50 level, suggesting bearish momentum remains dominant.

However, the Moving Average Convergence Divergence (MACD) continues to display a bullish crossover, indicating that underlying buying momentum may still be improving despite the recent correction.

For bullish sentiment to strengthen, BONK would likely need to reclaim the 50-day EMA and overcome resistance around $0.0000048. 

Until then, the memecoin may remain vulnerable to further volatility driven by developments surrounding the BonkDAO exploit.