The past week has been challenging for Toncoin (TON), which experienced a sharp 9.26% decline in market price. Despite the setback, a small recovery appears to be underway, with a modest 0.52% gain in the last 24 hours. While progress has been slow, some indicators point to a potential bullish breakout that may soon materialize.
Toncoin’s Bullish Potential – A Technical Perspective
According to AMBCrypto, there is a glimmer of hope for TON. The cryptocurrency has formed an inverse head and shoulders pattern on its chart—a classic signal often associated with bullish momentum. This pattern is characterized by three peaks: a lower left shoulder, a higher head, and a lower right shoulder.
For a bullish confirmation, the price needs to break above the neckline, which connects the two troughs formed between the shoulders. At press time, TON has yet to breach this key level, but if it does, traders could see the price target $5.804. If TON fails to break above the neckline, however, it could retest October lows around $5.139 or even dip further.
On-Chain Metrics Signal Market Uncertainty
While the technical setup looks promising, the broader market sentiment remains mixed. According to data from Coinglass, the OI-Weighted Funding Rate for TON remains positive at 0.0080%, signaling that many traders maintain a bullish outlook. The OI-Weighted Funding Rate is a key indicator that combines Open Interest and Funding Rates to measure the cost of holding long and short positions, and it typically reflects prevailing market sentiment.
Despite this, liquidation data paints a more neutral picture. Over $268,000 has been liquidated from the market recently, with $146,960 liquidated from long positions and $121,190 from shorts. This relative balance between long and short liquidations suggests the market is uncertain about TON’s next direction. For a definitive bullish breakout, a larger wave of short liquidations would be necessary. Without this, TON risks falling back to $5.139 or below.
Supply Dynamics Could Fuel a Breakout
Another factor contributing to TON’s potential breakout is a noticeable reduction in supply on exchanges. Over the past seven days, more than $19 million worth of TON has been withdrawn from exchanges, according to Coinglass. This indicates that traders are opting to hold their assets privately rather than sell them, which could reduce sell pressure and support price gains.
Negative exchange netflows—where more assets are withdrawn from exchanges than deposited—can often signal that investors expect a price increase. If this trend continues, it could reinforce bullish sentiment and set the stage for a breakout above the neckline, pushing TON toward the $5.804 target.
While the technical setup and on-chain data provide some optimism, the road ahead for TON remains uncertain. The cryptocurrency needs to breach the neckline to confirm a bullish trend, and a larger wave of short liquidations would be necessary to solidify that move. If these conditions are not met, TON could face further price declines.
Also Read: Toncoin (TON) Nears Critical Support – Will A 17% Drop To $4.43 Signal A Bearish Trend?
As the market waits for a clear direction, investors should monitor key metrics like the OI-Weighted Funding Rate, liquidation trends, and exchange netflows for signs of a breakout—or a deeper correction.
Toncoin’s recent price movements reflect a market in flux, with potential for both gains and losses. If the bullish technical patterns play out and the supply dynamics remain favorable, TON could see a significant price recovery. However, without strong market momentum, downside risks remain high.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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