Toncoin Bucks Market Downtrend Amid Concerns of Rising Wedge Formation
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NOIDA (CoinChapter.com) – In a surprising turn of events, Toncoin, the native token of The Open Network, managed to defy the overall downward trend in the crypto market and recover most of its 7.5% loss on June 24.
While popular cryptocurrencies like Bitcoin (BTC) and others have been experiencing a decline over the past week, Toncoin’s prices have actually risen by over 11% since June 18, reaching a daily high of nearly $7.6 on June 24.
However, Toncoin has not been without its challenges. Recent phishing attacks on the platform, involving fake websites and social media scams, have resulted in significant losses for users and raised concerns about security. Individual losses have ranged from 100 to over 10,000 Toncoin, which has shaken the trust of the community.
The Toncoin community has been warned about these phishing scams by Slow Mist, a blockchain security firm. The TON Foundation has been actively working to combat these threats through enhanced security measures and user education. However, the negative sentiment surrounding these incidents could potentially impact Toncoin’s market performance in a bearish manner.
In terms of price movement, the Toncoin token has formed a bearish pattern known as the “rising wedge.”
The rising wedge pattern is a signal of a potential reversal in the current trend. It is characterized by two upward-sloping lines that converge towards each other, with the resistance line having a gentler slope than the support line.
This pattern typically forms during an upward trend, with a series of higher highs and higher lows, indicating a decrease in buying momentum. As the wedge progresses, the distance between the resistance and support lines narrows, indicating weakening momentum.
Usually, the rising wedge pattern leads to a downward breakout, with the price breaking below the support line, often accompanied by increased trading volume, signaling strong selling pressure.
Traders use the vertical distance between the initial high and low points of the wedge to calculate the price target for the pattern. They subtract this distance from the breakout point to determine the potential downside target.
According to technical analysis, if the Toncoin price breaks below the bearish pattern, the token could potentially fall to a theoretical price target of around $5, which represents a drop of over 32% from current levels.
Despite these bearish signals, Toncoin managed to hold above the $7 support level on June 24 following a late recovery led by the bulls.
If Toncoin’s price continues to rally from this point, it is likely to target the resistance level near $7.6. Breaking through this immediate resistance could help Toncoin’s price aim for the 0.786 FIB resistance level near $8.
On the other hand, if Toncoin’s price falls from its current position, it could potentially drop below the 20-day EMA (red) trendline and test the 50-day EMA (purple wave) support level near $7.16. This support level has held strong since June 3. Breaching this immediate support could push Toncoin’s price down to test the support near $6.9.
The relative strength index (RSI) for Toncoin remained neutral, with a score of 54.13 on the daily charts.
