Toncoin price fell by 2% to $5.8 as the cryptocurrency market experienced a fresh wave of selling over the weekend. Leading cryptocurrencies, Bitcoin and Ethereum, slipped below $60,000 and $2,700, respectively, driven by escalating geopolitical tensions in the Middle East. Amid this ongoing correction, TON’s sustained position below the breakdown point of a bearish pattern indicates a potential decline ahead.
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Toncoin Price Poised For Prolong Downfall
The Toncoin price shows the formation of a well-known reversal pattern called head and shoulder in the daily chart. This setup consists of three peaks, with the middle peak (the head) being the highest and the two outside peaks (shoulders) being close in height and lower than the head.
Amid the pattern formation and market correction, the altcoin price plunged from $8.17 to $6.107, registering a loss of 26%, while the market cap fell to $14.9 Billion. The declining price gave a decisive breakdown from the neckline support at $6.5, accelerating the market selling pressure.
The Average Directional Index (ADX) slope spike to 30% indicates the strength in current correction and sellers dominance over this asset.
The derivative market data for Toncoin reveals an Open Interest (OI)-Weighted Funding Rate at -0.31. This negative rate indicates that short sellers are currently paying to maintain their positions, suggesting a strong bearish sentiment and expectations of further price declines.
The potential downside target for the head and shoulders pattern is typically calculated by measuring the vertical distance from the top of the head to the neckline and extending it downward from the breakdown point. With this projection, Toncoin’s price is expected to decline by an additional 24% to potentially find support at the May 2024 projected low of $4.6.
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Moreover, the Total Value Locked (TVL) in the Toncoin network has suddenly dropped from $760 to $676, registering a loss of 11%. This decline in TVL indicates a substantial reduction in liquidity and possibly diminishing investor confidence, which could exacerbate the bearish outlook.
On the contrary note, the falling Toncoin price could witness a renewed demand pressure at $5.56, coinciding with the 200-day Exponential Moving Average (EMA) slope. The potential rebound weakened the bearish and bolstered Toncoin price to surpass $7 after a 16% jump.
Frequently Asked Questions (FAQs)
The Open Interest (OI)-Weighted Funding Rate in derivatives trading measures the cost paid by traders to keep leveraged positions open overnight. A negative rate, such as -0.31, typically indicates that short positions are predominant.
Total Value Locked (TVL) is a metric used in the cryptocurrency market to measure the total value of crypto assets deposited in a decentralized finance (DeFi) protocol. It is often used as an indicator of the health and growth of a DeFi network.
The Average Directional Index (ADX) is a technical analysis indicator used to quantify the strength of a trend.
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Sahil Mahadik
Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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