Analysis
Is Toncoin [TON] ready to rally again after the past month’s consolidation?
Posted:
Journalist
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Toncoin showed a higher timeframe uptrend from late August
- The lower timeframe price chart pointed toward a possible bullish breakout, but should traders trust it?
Toncoin [TON] bulls profited from the recent Bitcoin [BTC] surge. Since 20 October, TON rallied close to 10%. However, the higher timeframe price charts showed that the token was already trending higher.
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This HTF rally began in late August when a local high at $1.53 was flipped to support. This move saw a shift in the market structure, and TON has maintained the uptrend.
The local resistance at $2.27 saw a sharp rejection
Source: TON/USDT on TradingView
In mid-September, Toncoin rallied from $1.538 to $2.599 in a week, a move that measured 62%. This rally was used to plot a set of Fibonacci retracement levels (pale yellow). The past month saw TON retrace from $2.6 to $1.92.
The prices then consolidated within the $1.92-$2.16 region. The recent BTC move saw TON climb to $2.23 and signaled a potential uptrend. However, the indicators were not wholly behind the idea.
While the Relative Strength Index (RSI) continued to move above the neutral 50 on the four-hour chart, the Chaikin Money Flow (CMF) was below -0.05.
Despite the recent gains, the CMF showed significant capital flow out of the market. This suggested that TON was not yet ready for a genuine breakout and another rally. A move above $2.27 would be a good signal of firm bullish intent.
Open Interest showed bullish sentiment and gained some traction in recent days
Source: Coinglass
The Open Interest (OI) chart spiked wildly higher during TON’s rally to $2.6 in September. It saw a retracement with the price in early October, before bouncing higher over the past ten days. This reflected a growing bullish conviction in the market.
Realistic or not, here’s TON’s market cap in BTC’s terms
A drop below $2.12 would flip the TON market structure bearishly on the H4 chart. It would also point toward the likelihood of another retest of the $1.9 zone which marked the lows of the consolidation.
