During the previous week, Toncoin [TON] experienced a turbulent period, marked by a 9.26% decline in its market value. While there are glimpses of a potential recovery, progress has been limited, with only a marginal 0.52% increase in the past 24 hours.
Despite the lackluster performance, there remains a ray of hope as CryptoCrypto hints at the possibility of positive momentum in the near future.
Potential Upside for TON
Presently, TON has formed an inverse head and shoulders pattern, a conventional indicator of potential upward momentum.
Illustrated on the chart, this pattern comprises three peaks: a left shoulder, a higher head, and a lower right shoulder.
A confirmation of a bullish trend typically occurs when the price surpasses the neckline, connecting the two low points between the shoulders.
Currently, TON is yet to breach the neckline. Once achieved, it would confirm a bullish trajectory, with a possible target price of $5.804. Failure to do so might lead to a drop towards its October low of $5.139 or even lower.
Nevertheless, a thorough analysis of on-chain metrics is crucial to gauge the likelihood of a breakout.
Metrics Point to Uncertainty
As per Coinglass, the OI-Weighted Funding Rate remains positive, standing at 0.0080% currently, signaling a bullish sentiment prevailing in the market.
This rate combines Open Interest and Funding Rates to evaluate market sentiment and the expenses associated with holding long or short positions in derivatives.
While this metric hints at a potential bullish movement, data on liquidation indicates a state of neutrality, suggesting a potential shift towards a downtrend.
Recent information reveals liquidations totaling $268.15 thousand, with $146.96k from long positions and $121.19k from shorts, showcasing a well-balanced market scenario.
For a bullish breakout to materialize, a significant wave of short liquidations would be necessary, with a notable difference from long liquidations. In the absence of this scenario, TON might regress towards $5.139.
Potential Breakout Fueled by Reduced Supply
Current data illustrates a notable amount of TON being withdrawn from various exchanges over the last seven days, which could influence market dynamics.
Coinglass reports that over $19 million worth of TON has been transferred off exchanges, indicating a preference among traders to retain their assets privately rather than trade them.
If this negative Exchange Netflow trend continues, it could reinforce the existing bullish sentiment in the market, potentially paving the way for a breakout.