Bonk Drops 10% Following Safety Shot Partnership Backlash

Bonk experienced a sharp decline, losing over 12% in a single day and around 5% during the last week. The drop came after the announcement of a collaboration with Safety Shot, a Nasdaq-listed beverage firm. Investor doubts about this partnership triggered a sell-off that had a strong negative impact on Bonk’s value.

Concerns Over Bonk’s Corporate Deal

On August 11, Safety Shot unveiled plans to allocate $25 million from its treasury to purchase Bonk tokens, presenting this as a strategic move to deepen its connection with the memecoin’s ecosystem. Despite this, the market reacted negatively. Safety Shot’s stock price fell by half soon after the announcement, reflecting investor unease about the deal’s financial stability.

The main source of concern is the issuance of convertible preferred shares worth $35 million, which could dilute current shareholders. Even more worrisome is Safety Shot’s proposed holding of 77 trillion Bonk tokens, roughly 10% of the circulating supply. This raises the risk of significant token sell-offs that might overwhelm the market. The possibility of increased liquidity has driven down Bonk’s price as traders question the short-term advantages of the partnership.

While corporate investments from company treasuries often suggest strong confidence and future growth, this situation lacks clear signs of immediate value or ecosystem integration for Bonk. Without tangible improvements like product updates or enhanced network effects, the agreement seems speculative at this point. Investors are watching carefully to see if Safety Shot’s stock can recover and whether stronger commitments on token restrictions will help calm liquidity concerns.

Technical Analysis and Market Momentum

Bonk’s price action suggests a cautious outlook. The token recently fell below its 30-day simple moving average, trading under $0.0000299, and broke past the Fibonacci 23.6% support level near $0.0000243. These technical indicators point to weakening momentum. RSI is close to 44.1, showing reduced buying interest, while the MACD histogram remains negative, signaling bearish sentiment.

Algorithmic traders may have contributed to the drop by reacting to these breaks in key support levels. A critical pivot point around $0.000026, which had acted as a floor since late July, did not hold, triggering automated sell orders and higher volatility. Now, focus shifts to the next major support at the 38.2% Fibonacci retracement, near $0.0000235, the same level seen on August 11.

If Bonk closes below this area, liquidations might speed up, potentially pushing the price toward $0.000020. Still, it is important to remember that memecoin markets often experience sudden shifts, and technical rebounds can be rapid, especially if new positive factors appear.

Broader Market and Ecosystem Implications

Looking past the immediate price movements, this case reveals wider trends in the memecoin sector. Bonk ranks fifth among memecoins by market cap, valued at about $1.9 billion with 77 trillion tokens in circulation. Despite this scale, the excitement that drove prices to their highest point in late 2024 has noticeably faded. Since November, Bonk’s price has dropped more than 50 percent, reflecting a general slowdown in the market.

Jarrett Boon, CEO of Safety Shot, highlighted the strategic choice to back Bonk due to its “advanced technology,” which offers faster and cheaper transactions compared to competitors such as Shiba Inu and Pepe. The company views this as a key part of its growth plan. Still, investor reaction has been cautious, as shown by the steep sell-off of Safety Shot shares.

This contrast underscores the challenges memecoins encounter when pursuing corporate collaborations. Technological benefits and community enthusiasm are important, but clear use cases and investor trust remain critical. As the market becomes more skeptical of hype-driven assets, showing real value and transparency in token economics is vital.

What to Expect Now?

The recent drop in Bonk illustrates how vulnerable memecoin markets remain to perceived threats and unclear strategies. The backlash triggered by the announcement of Safety Shot’s treasury deal has created worries about liquidity that overshadow possible future gains. On the technical side, the token is nearing critical support zones, and losing these could worsen the decline.

From this point, focus will be on how Safety Shot’s stock performs and on any clarifications related to Bonk’s token lock-up terms. It will also be important to see if the memecoin can regain momentum through ecosystem enhancements or fresh catalysts.