Toncoin (TON), the cryptocurrency linked to the Telegram messaging app, has experienced a strong start to June, surging 34.50% month-to-date to reach $8.33 on June 14th. However, analysts warn that a mix of technical indicators suggest a potential correction in the remaining weeks of the month.
Toncoin Nears Overbought Territory
The recent price surge has pushed TON’s daily Relative Strength Index (RSI) to 67.87, nearing the overbought threshold of 70. Historically, such high RSI readings have often preceded price pullbacks for TON. Additionally, the price is currently testing a multi-week horizontal resistance line. If a correction materializes, the next support level could be around $6.55, where an ascending trendline meets the 50-day Exponential Moving Average (EMA). This translates to a potential decline of 20% by June’s end.
Rising Open Interest Meets Negative Funding Rate
The price increase coincides with a significant rise in TON futures’ open interest (OI), which climbed to $239.38 million on June 14th, up from $192.25 million two days prior. However, despite the rising OI, TON’s funding rate remains negative at -0.22% per week, indicating that short positions are paying long positions.
This suggests more traders are betting on a price decline or hedging against potential drops. While rising OI and price typically signal bullish sentiment, the negative funding rate and high RSI raise caution flags. If short sellers cover their positions and buying pressure subsides, a price reversal or consolidation could occur, leading to a significant price drop.
Ascending Triangle Breakout on the Horizon?
The anticipated June correction may be part of a larger consolidation phase within an ascending triangle pattern, a bullish continuation signal in technical analysis. If the price breaks above the triangle’s upper trendline, the potential upside target could be around $13.30 in July, representing a roughly 65% increase from current levels.
Overall, the outlook for Toncoin in June remains uncertain. While technical indicators suggest a potential correction, a breakout from the ascending triangle pattern could lead to significant gains in July.
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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