Toncoin (TON), a digital currency connected with the well-known Telegram platform, has experienced a significant increase of 34.50% so far this month, reaching $8.33 on June 14. However, due to a combination of negative factors, there is now a potential for a sharp decline in the coming weeks.
The price of TON is approaching the overbought zone, with the daily relative strength index (RSI) currently at 67.87, just below the overbought threshold of 70. Historically, this has signaled impending price pullbacks for TON.
Further indications of a possible downturn include TON’s price challenging a horizontal trendline resistance that has been in place for several weeks. If a correction occurs, the next support level to watch for is the convergence of an ascending trendline and the 50-day exponential moving average (50-day EMA) around $6.55.
In essence, TON could potentially drop by 20% by the end of June.
The recent surge in Toncoin’s futures’ open interest to $239.38 million on June 14 from a low of $192.25 million indicates increased market activity. However, the funding rate for TON futures is currently negative at -0.22% per week, suggesting a higher number of short positions compared to long positions in the market.
While rising open interest and prices suggest a bullish trend, the negative funding rate and high RSI signal a need for caution. If short positions are closed and buying pressure diminishes, a reversal or consolidation could occur, leading to a significant price decrease.
Looking ahead, TON’s correction in June is part of a larger consolidation phase within an ascending triangle pattern, indicating a potential bullish continuation. Typically, an ascending triangle pattern resolves with a breakout above the upper trendline, potentially leading to a 65% increase in price to around $13.30 in July.
It is important to note that this article does not offer investment advice or recommendations. All trading decisions involve risk, and readers are advised to conduct their own research before making any financial decisions.