Toncoin’s bearish outlook: Why Binance listing’s price surge may not last Read CoinChapter.com on Google News
NOIDA (CoinChapter.com)— Binance announced the listing of the Toncoin (TON) token, sparking significant interest and resulting in a rapid 23% price surge since Aug. 8 to reach a daily high near $6.8 on Aug. 10.
The new trading pairs—TON/BTC, TON/USDT, TON/FDUSD, and TON/TRY—launched on Aug. 8, 2024, attracting a wave of trading activity. Listings often have a bullish impact on a token, and the same was the case with Notcoin.
News of the listing pushed the NOT USD pair shooting upwards, but several key indicators suggest that the rally might not last.
Bearish Indicators Emerge From Toncoin’s Market Dynamics
The recent increase in Toncoin’s open interest (OI) coupled with a declining funding rate reveals a growing bearish sentiment in the market.
TON futures open interest. Source: Coinglass
It is likely that most traders opening new positions are leaning towards shorts, overshadowing the rise in OI, typically a sign of increased market participation. The negative OI-weighted funding rate underscores the observation, which indicates that traders are paying to maintain their short positions.
Toncoin OI-weighted funding rate
Such a scenario points to market participants’ expectations of a price decline. Historically, a negative funding rate combined with rising OI has often preceded price corrections, suggesting that the recent price surge could be on shaky ground.
Moreover, on-chain data reveals a troubling trend for Toncoin. Large holders, or whales, have been steadily reducing their positions while smaller holders remain committed.
Toncoin supply distribution by balance of addresses. Source: Santiment
This divergence between whale and retail activity typically signals a lack of confidence among the bigger investors, whose decisions can govern market sentiment. The exit of these large holders can exert downward pressure on the price, especially if smaller holders lack the buying power to absorb the selling pressure.
Additionally, Toncoin’s price action reflects broader market trends that could lead to further declines. While Binance’s listing has provided a temporary boost to Toncoin’s price, the underlying market indicators suggest caution.
Downside Risks From Technical Setup
Moreover, the Toncoin price faces bearish risks from a technical setup called the ‘descending triangle.‘
TON price formed a bearish pattern with a 48% downside target. Source: Tradingview
Analysts recognize the descending triangle as a bearish continuation pattern. The configuration features a declining upper trendline that compresses price action into lower highs, while a flat lower trendline serves as consistent but weakening support.
The pattern signals intensifying selling pressure, resulting in progressively weaker rallies that struggle to breach resistance.
In this setup, traders estimate the potential downside by measuring the maximum height of the triangle. Toncoin’s price recently broke out of this descending triangle, only for bulls to temporarily push it back within the pattern. However, if Toncoin confirms the bearish setup, the TON/USD pair could plummet by over 48%, reaching a target near $3.52.
A breakout below the pattern in the current market climate could be catastrophic for TON, with the trading pair potentially facing significant losses. If the TON rally fails, bulls will likely attempt to consolidate above the key support level to mount a defense.
Still, the prevailing market sentiment indicates a challenging road ahead for any sustained rally.
The post Here’s Why Binance Listing-Driven Toncoin (TON) Rally Might Not Last appeared first on CoinChapter.
