Toncoin: Bull run continues, but is a correction on the cards?

• TON’s value climbed by almost 90% in the last month.
• However, the price ventured into overbought highs, signaling a possible retraction. 

Toncoin’s [TON] value has rallied by over 85% in the last month due to a seven-fold increase in active TON addresses on the Ethereum [ETH] network, on-chain data provider IntoTheBlock noted in a recent tweet on X (formerly Twitter).

The price of $TON has made a significant recovery in the last month. This increase has also resulted in a 7x+ increase in active $TON addresses on the Ethereum network. @ton_blockchain pic.twitter.com/7hfE29HfUt

— IntoTheBlock (@intotheblock) September 19, 2023

Read Toncoin’s [TON] Price Prediction 2023-24

At press time, the Telegram-endorsed crypto asset exchanged hands at $2.54. Data tracked by CoinMarketCap revealed that TON ranked as the asset with the most gains in the last seven days, with a 38% uptick during that period. 

Source: CoinMarketCap

Apart from the hype surrounding the coin’s integration into Telegram, the price hike in the last month is also attributable to the non-significant correlation TON shares with leading coin Bitcoin [BTC].

During the same period, BTC’s value increased by a mere 3% and continues to face significant resistance at the $26,000 price mark. 

Is the end here?

TON’s price movements on a daily chart confirmed the state of bullishness amongst the coin’s daily traders. When the alt’s price began its uptrend, the surge in accumulation put TON buyers above its sellers in the spot market, and they have since remained in control. 

The coin’s Directional Movement Index (DMI), which measures the strength and direction of a price movement, showed the Positive Directional Indicator (green) positioned above the Negative Directional Indicator (red) at press time. 

When the green line rallies above the red line, it indicates that there is more upward pressure on the price than downward pressure, as buyers’ power exceeds the sellers.

Despite the fact that TON accumulators are in control of the market, the asset has been pushed to overbought levels. This suggests that a price retraction may be on the horizon.

When an asset is deemed “overbought,” it can be a sign that it is due for a correction. This is because the price has risen to an unsustainable level in the long term.

Realistic or not, here’s TON’s market cap in BTC’s terms

The primary indicator of this was TON’s Chaikin Money Flow, which diverged from its price on 6 September. While the asset’s price has rallied since then, its CMF continues to trend downwards. This creates a bearish divergence that is often interpreted as a sell signal. 

Likewise, TON’s key momentum indicators were stationed at overbought highs that the bulls might be unable to support. The coin’s Relative Strength Index (RSI) and Money Flow Index (MFI) were 76.55 and 92.62 at press time. At these levels, a price pullback is common. 

Source: TON/USDT on TradingView