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Toncoin Facing Potential 17% Drop Amid Market Weakness
Oct. 04, 2024. 1 min. read.
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Toncoin (TON) risks a 17% drop as it approaches critical support, with negative funding rates and bearish indicators suggesting further declines if the current level doesn't hold.
Toncoin (TON), the cryptocurrency linked to Telegram, has experienced a nearly 10% decline in value over the past week, raising concerns among investors. The token’s price is approaching a critical support level that has been maintained since March, and if this level fails, Toncoin could face an additional 17% drop.
Toncoin’s technical analysis suggests that the token may see further declines. Its funding rate, currently at -0.0068%, highlights traders’ skepticism about a price recovery in the near term. This negative funding rate, indicating that more traders are shorting the asset, increases the downward pressure on the token as short sellers sell to limit their risk.
“When the funding rate is negative, it signals that traders are expecting prices to continue falling,” analysts have noted. This creates a feedback loop where the falling price prompts more shorting, further driving down Toncoin’s value.
Adding to this bearish outlook is the token’s Directional Movement Index (DMI), which reveals that sellers currently have the upper hand. The DMI shows the positive directional indicator for TON below the negative directional indicator, signaling that downtrends are outpacing upward movements. “This setup indicates that sellers are dominating the market,” analysts explained.
Currently trading at $5.34, Toncoin is teetering on the edge of its horizontal support channel. In early September, it touched this level but managed to avoid falling further due to strong buying support. If history repeats, TON could see a price reversal toward $7.96. However, should the support level break, analysts predict a 17% drop, bringing Toncoin down to a monthly low of $4.43.
The coming days will be critical for Toncoin holders, as the token’s next move could determine whether the bulls can regain control or if further losses are on the horizon.
Source: This Is Why Toncoin (TON) May Drop By 17% in the Near Term
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