Toncoin's Strong Rise Stirs Anticipation Amid Potential Correction and Bullish Indications
Summary:
Toncoin (TON), the cryptocurrency tied to the Telegram platform, has seen a significant increase this month but faces potential correction due to bearish indicators. Factors such as its daily relative strength index nearing overbought level and a rising futures' open interest amid a negative funding rate point towards possible caution. However, an ascending triangle pattern implies a potential bullish continuation, with the possibility of a 65% increase in July. The article stresses that all investment moves carry risk, advising readers to conduct independent research before making decisions.
The cryptocurrency connected to the widely-used Telegram platform, Toncoin (TON), has seen a 34.50% elevation this month, peaking at $8.33 on June 14th. However, a few bearish indicators suggest that a swift rollback might occur in the coming weeks.
The current rise in the Toncoin market has driven its daily relative strength index (RSI) to 67.87, wavering dangerously close to the overbought boundary of 70. Historically, the RSI at this level has often led to significant price reductions for TON.
Further indication of this downturn comes from TON's price challenging a horizontal resistance trendline of several weeks. If a correction takes place, it is likely that the next downward target will be the support overlap formed by the upward trendline and 50-day exponential moving average (50-day EMA, represented by the red line) at approximately $6.55. Thus, TON might see a 20% decrease by the end of June.
The noticeable increase in the Toncoin market aligns with the sharp incline in its future's open interest (OI), which has jumped to $239.38 million on June 14th from a local minimum of $192.25 million just two days prior. However, TON's funding rate, which stands at -0.22% per week and has remained negative since June 12th, conflicts with the nearly 18.50% leap in TON's spot price over the same timeframe.
A negative funding rate denotes short positions financing long positions, indicating a predominance of short over long positions in the market. Essentially, futures traders are either preparing for a price dip or shielding against possible falls. Thus, in spite of the rising OI and price signalling a strong bullish trend, the negative funding rate and high RSI emphasise restraint. If shorts decide to cover their positions and buying pressure diminishes, the market may see a reversal or consolidation, possibly triggering a sizable cost downturn.
From a broader perspective, the projected correction in June for TON's price can be identified as part of a consolidation slide inside what vaguely resembles an ascending triangle, a bullish pattern. According to technical analysis norms, an ascending triangle tends to resolve with the price cutting through its upper trendline and climbing by a distance equal to the longest range between the triangle's upper and lower trendline. TON is currently nearing the peak of the triangle, enhancing the chance of a future breakout.
If the breakout indeed occurs, TON's upward target could hit about $13.30, increasing by approximately 65% from today's price range in July.
Disclaimer: This article doesn't offer investment advice or suggestions. Every financial endeavour involves risks, and readers are advised to carry out independent research before making any financial decisions.
Published At
6/14/2024 7:44:48 PM
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