Toncoin Price Breaks Down Below Major Support; Another Sell-Off Ahead?

Toncoin price fell by 2% to $5.8 as the cryptocurrency market experienced a fresh wave of selling over the weekend. Leading cryptocurrencies, Bitcoin and Ethereum, slipped below $60,000 and $2,700, respectively, driven by escalating geopolitical tensions in the Middle East. Amid this ongoing correction, TON’s sustained position below the breakdown point of a bearish pattern indicates a potential decline ahead.

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Toncoin Price Poised For Prolong Downfall

The Toncoin price shows the formation of a well-known reversal pattern called head and shoulder in the daily chart. This setup consists of three peaks, with the middle peak (the head) being the highest and the two outside peaks (shoulders) being close in height and lower than the head.

Amid the pattern formation and market correction, the altcoin price plunged from $8.17 to $6.107, registering a loss of 26%, while the market cap fell to $14.9 Billion. The declining price gave a decisive breakdown from the neckline support at $6.5, accelerating the market selling pressure.

The Average Directional Index (ADX) slope spike to 30% indicates the strength in current correction and sellers dominance over this asset.

The derivative market data for Toncoin reveals an Open Interest (OI)-Weighted Funding Rate at -0.31. This negative rate indicates that short sellers are currently paying to maintain their positions, suggesting a strong bearish sentiment and expectations of further price declines.

The potential downside target for the head and shoulders pattern is typically calculated by measuring the vertical distance from the top of the head to the neckline and extending it downward from the breakdown point. With this projection, Toncoin’s price is expected to decline by an additional 24% to potentially find support at the May 2024 projected low of $4.6.

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Moreover, the Total Value Locked (TVL) in the Toncoin network has suddenly dropped from $760 to $676, registering a loss of 11%. This decline in TVL indicates a substantial reduction in liquidity and possibly diminishing investor confidence, which could exacerbate the bearish outlook.

On the contrary note, the falling Toncoin price could witness a renewed demand pressure at $5.56, coinciding with the 200-day Exponential Moving Average (EMA) slope. The potential rebound weakened the bearish and bolstered Toncoin price to surpass $7 after a 16% jump.