Toncoin (TON), the native cryptocurrency of the Telegram ecosystem, has been navigating choppy waters lately. Following the arrest of Telegram CEO Pavel Durov in France, TON has experienced a dramatic price drop of over 25%. Despite this recent plunge, the coin is showing promising signs of a potential breakout and rally.
Current Price Dynamics – A Crucial Juncture
As of now, TON is struggling to regain its footing, trading around the $5.20 mark. The coin has been consolidating within a tight range between $5.10 and $5.24 for the past 20 hours. This period of consolidation has set the stage for a critical breakout. According to expert technical analysis, TON has formed a bullish descending triangle on the four-hour chart, which often precedes a significant price movement.
For a bullish scenario, TON needs to break out of this consolidation zone. If it can close a four-hour candle above the $5.30 level, we could see the price surge by 15%, potentially reaching $6. Conversely, if TON fails to hold its current support level of $5.08 and closes a four-hour candle below this mark, a substantial sell-off might follow.
The Relative Strength Index (RSI) is currently in the oversold territory, hinting at a possible reversal from the recent downtrend. This technical indicator suggests that the coin might be poised for a rebound if buying pressure picks up.
On-Chain Metrics Reveal Bullish Signals
Bullish on-chain metrics offer further optimism. The Sentiments’ Supply Distribution metric shows a notable shift in wallet holdings. There has been a significant drop in the number of wallets holding 100,000 to 1 million TON tokens. In contrast, the number of wallets holding between 1 million and 10 million TON tokens has surged dramatically from zero to 1.11 million since Durov’s arrest. This accumulation by larger holders, or “whales,” could signal a strategic buying opportunity and suggests that these large investors might see this price drop as a chance to acquire more TON at a discount.
Also Read: Toncoin (TON) Slumps 26.5% In Two Weeks – Can $5 Support Sustain Amidst Increased Volatility?
Market Activity and Open Interest Trends
At press time, TON’s trading volume has increased by 25% over the past 24 hours, reflecting heightened market participation and interest. This surge in trading activity comes amidst a price drop of over 2% in the same period. However, open interest, which measures the total number of outstanding derivatives contracts, has decreased by 2% recently. This drop could indicate some apprehension among traders due to the current bearish sentiment.
As Toncoin navigates this period of consolidation and potential breakout, traders and investors should watch closely for key price levels. A successful breakout above $5.30 could signal a promising rally, while a drop below $5.08 might lead to further declines. With bullish on-chain metrics and increasing trading volume, TON remains an intriguing asset to watch in the coming days.
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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