BONK price jumps on CPI relief: can bulls break the $0.0000040 wall?

Bonk BONK is bullish on Wednesday, trading around $0.0000037 as improving macroeconomic conditions lifted sentiment across the cryptocurrency market.

The meme coin benefited from a broader rally after the latest US Consumer Price Index (CPI) report showed inflation slowed more than expected, increasing optimism that the Federal Reserve could adopt a more accommodative monetary policy.

Memecoins rally on softer US inflation data

According to data from the US Bureau of Labor Statistics, the Consumer Price Index declined by 0.4% month-over-month in June, marking the sharpest monthly drop since April 2020.

As a result, annual headline inflation slowed to 3.5%, down from 4.2% in May.

Meanwhile, core inflation, which excludes food and energy prices, remained unchanged on a monthly basis, leaving the annual core inflation rate at 2.6%, compared with 2.9% in the previous month.

The softer inflation readings improved investor sentiment across equities and cryptocurrencies, encouraging renewed demand for higher-risk assets such as meme coins.

Leading memecoins, including Dogecoin, Shiba Inu, Fartcoin, PEPE, and BONK, are all in the green following yesterday's report.

The recent price discovery is supported by rising derivatives data.

According to CoinGlass, Bonk perpetual futures open interest (OI) rose by 5% in the last 24 hours and now stands at $6.28 million.

Rising open interest suggests traders are opening leveraged positions, reflecting stronger speculative demand.

If this trend continues, it could increase the momentum behind BONK's current rebound.

BONK technical outlook: Bulls target break above $0.0000040

The BONK/USD 4-hour chart remains bearish despite the recent rally. However, BONK continues to strengthen as buyers push the token toward the important $0.0000040 resistance level.

Momentum indicators are becoming increasingly supportive.

The Moving Average Convergence Divergence (MACD) indicator has generated a bullish crossover on the four-hour chart. The RSI of 37 means that BONK is exiting the oversold territory.

A decisive daily close above $0.0000040 would improve BONK's short-term outlook, although the broader trend remains cautious.

If BONK breaks above $0.0000040, traders will likely focus on the next major resistance level at $0.0000041 (50-day EMA). 

The other major resistance levels include the 100-period EMA at $0.0000042 and the 200-period EMA at $0.0000044.

These moving averages represent significant technical barriers where sellers could attempt to regain control.

However, if the buying momentum fades, immediate support is located near Monday’s low of $0.0000036.

Failure to defend this support could see BONK extend its decline towards the $0.0000033 level over the next few days.

Holding above these levels would help preserve BONK's recovery and maintain the possibility of another attempt to break above the psychological $0.0000040 level.

Bonk is benefiting from renewed optimism across the cryptocurrency market after softer US inflation data boosted risk appetite.

A confirmed close above $0.0000040 would strengthen the bullish case, but sustained buying participation will likely be needed for BONK to overcome the next series of moving-average resistance levels.