TON’s 12% fall – Why short-term decline could lead to long-term growth

• A recent spike in large-volume transactions coincided with TON’s price drop, signaling potential near-term weakness
• However, a possible rally could be forming as chart patterns suggested an upward shift may follow

Over the past month, Toncoin [TON] has lost 10.12% of its value – A sign of recent bearish momentum. And still, the rise in large transaction volumes, combined with emerging technical indicators, suggested that this dip may be temporary, with a rebound likely in the near future.

Large sell-off pushes TON into short-term decline

TON has recorded a surge in large transactions over the last 24 hours. According to data from IntoTheBlock, these transactions have risen to 1,850.

A spike in large transaction counts, coupled with a price dip and a 27% hike in volume to 195.15 million, together, were a sign of bearish momentum. They also hinted at a further decline as whales have been selling.

Source: IntoTheBlock

Technically, this downturn is expected to be short-lived, with TON likely to hit a support level around $4.601. This is where a strong buying cluster could drive a price rebound, which wasn’t far from its press time price of $4.873.

This support seemed to align with a descending line pattern, which may act as a bullish catalyst if TON breaks above the line with a confirmed close. Such a breakout could push the price up to a target of $7.262.

However, if selling pressure intensifies, TON may instead drop to a lower support level near $3.319.

Source: Trading View

Sentiment aligns with TON’s bullish outlook

The prevailing narrative for TON suggested that a short-term decline may precede a rebound that could drive the asset towards a long-term target.

Market sentiment, at the time of writing, pointed to a possible short-term decline. Especially as liquidation data from the past 24 hours revealed that long traders have taken significant losses – A sign of potential downward pressure.

Specifically, long traders have lost $340.9k, a notable contrast to the $76.76k lost by short traders. This disparity is a sign that the market has been moving counter to the side with larger losses—A sign of further downside for TON.

Source: Coinglass

However, with short liquidations at a relatively close level to long liquidations, the selling pressure remained moderate. What this means is that any drop may be limited and could set the stage for a quick rebound.

Further supporting this potential reversal was the Weighted Funding Rate—A fee exchanged between traders in perpetual Futures markets based on long and short positioning. At press time, it had turned positive.

A positive funding rate means long positions are paying short positions – A sign of increasing bullish sentiment. This shift suggested that despite a possible brief decline, TON’s price may soon find support and turn north.

In summary, while TON may record a short-term pullback, growing bullish sentiment and moderate selling pressure suggested that any decline could be short-lived. This can potentially propel the asset towards an accelerated recovery.