Toncoin surged to a high of $2.60 last Sunday and has since been in a downtrend. The session marked the last significant upward movement.
It is seeing a repeat of last week’s actions, trading up by over 2% after several days of consistent decline. The recent hike suggests that TON may be gearing up for recovery. which may start in the coming week.
In hindsight, it is due, as it has been in decline for most of the last 14 days. The downtrend began on May 8, when it shed over 7%, falling from $2.79 to $2.51.
It continued downward, losing over 29% between 8 and 16. Most of the losses happened over the last six days. The altcoin shed over 20% and is trading below $2 at the time of writing.
Nonetheless, the latest downtrend is unsurprising, as a previous analysis hinted at it. Following the surge to $2.90, one article explored the options of a possible surge to $5. It noted that the previous surge was in response to Pavel Durov’s announcement of improvements in Toncoin and concluded that the uptrend has hit a brick wall.
Since the buying frenzy surrounding the coin faded, it has struggled to hold any key levels. However, trading action over the last 48 hours offers a glimmer of hope.
It retraced to a low of $1.86 on Saturday and rebounded. It repeated the same action a few hours later and is trading notably higher at the time of writing. The 4-hour chart suggests the recent rebound may be the start of another drive toward $2.
The moving average convergence divergence suggests that this may be the case, as it displays a positive crossover. However, the 1-day chart shows that the downtrend may continue in the coming week.
Toncoin May Retest $1.60
Amid the recent rebound, a closer look at the chart shows the altcoin faced rejection at the same level as on Saturday. It means it continues to face selling congestion, and the bulls are unable to stage a rally to break above this distribution zone. If the trend continues, the downtrend will resume, starting on Monday.
Aside from price movements, indicators are also hinting at further decline. For example, Toncoin is trading above the 20 VWMA. Previous price action shows it has not been a level the bulls have defended. They prefer the 50 VWMA, which is currently lower.
The indicator currently sits at $1.56, indicating that a slip to this level is likely. Additionally, the relative strength index, which was above 70 last week, is at 53. Per previous movement, it rebounds around 46, suggesting that the recent uptick will be short-lived.
Adding to the piling negative readings is investors’ flip to bearish in the derivatives market. The funding rate has been positive over the last fourteen days amid the price downtrend. However, it flipped negative on Sunday, indicating that shorts are rising and may snuff out the recent hike.
Nonetheless, open interest is significantly higher on Sunday compared to the previous day. It remains to be seen if it will be enough to cause a short squeeze. The chances of such a squeeze rise given the positive CVD.
In summary, the likelihood of Toncoin slipping even lower in the coming days is notably high. It may be gearing up for a 15% drop over the next seven days.
