Toncoin Price Faces Significant Decline Amid Market Correction
- The price of Toncoin has plummeted 26% as it forms a head-and-shoulders pattern during a market downturn.
- Market data reveals a bearish outlook as the Total Value Locked (TVL) in Toncoin drops significantly.
- Analysts suggest further decline as traders maintain short positions, expecting the price to hit $4.6.
Toncoin’s recent market movement signals potential further downside amidst bearish head-and-shoulders pattern and liquidity withdrawal.
Toncoin Price Breakdown: Targets $4.6 Amid Bearish Sentiments
Toncoin’s price has exhibited a head-and-shoulders pattern recently, a classic indicator of a potential downturn. This bearish formation is identified by three peaks, with the highest peak (the head) flanked by two lower, comparable peaks (the shoulders). In response to the pattern and market corrections, Toncoin dropped from $8.17 down to $6.107, marking a 26% decrease in value.
Market Indicators and Trader Sentiments
Derivative market analysis shows the Open Interest (OI)-Weighted Funding Rate at -0.31, indicating that traders holding short positions are paying to maintain their stance, signifying a prevailing bearish sentiment. This negative rate suggests that market participants are expecting further price declines.
Liquidity Withdrawal: Impact on Toncoin’s Future
The Total Value Locked (TVL) in the Toncoin network has declined markedly, falling from $760 million to $676 million in a short span, a decrease of 11%. This significant reduction in liquidity might reflect dwindling investor confidence, potentially exacerbating the downward trend.
Price Analysis and Future Projections
Should the bearish trend continue, the downside target for the head-and-shoulders pattern could see Toncoin pricing as low as $4.6. This target is calculated by measuring the vertical distance from the peak of the head to the neckline, extending that distance downward from the breakdown point. This predicted 24% decrease aligns with the ongoing market sentiment and liquidity issues.
Potential Rebound Scenarios
Despite the bearish outlook, there might be a glimmer of hope as the price might find support near the $5.56 mark, coinciding with the 200-day Exponential Moving Average (EMA). A bounce from this level could spur a moderate recovery, pushing Toncoin above $7, indicative of a short-term 16% surge.
Conclusion
Toncoin’s current market scenario presents a predominantly bearish outlook with the formation of the head-and-shoulders pattern, plummeting TVL, and negative trader sentiments. The projected downside target of $4.6 seems plausible unless substantial buying pressure emerges around the EMA support level. Investors should tread cautiously, focusing on market signals and prepared for potential further declines or moderate recoveries.
