Ton coin could be on the verge of a major breakout based on its price action pattern that has been in play for months. Moreover, some analysts are confident that the breakout could potentially likely yield as much as a 40% upside or even more.
The prediction was based on a Toncoin wedge pattern that has been playing out for the last 5 months. The pattern was underpinned by descending support and ascending resistance, forming the wedge pattern.
Interestingly, the predictions of a potential bullish breakout were based on the fact that price concluded May with a push into the tight zone. In addition, its latest ascending support retest held strong, resulting in a cool down in sell pressure.
Toncoin price action briefly dipped below $3 in the last 24 hours, but it bounced back to a $3.12 press time price tag after retesting the support.
The cryptocurrency’s MFI signaled that there were significant liquidity inflows in the last 24 hours. This confirmed growing expectations of a bounce back.
Can Ton coin secure enough demand for a breakout?
Toncoin’s spot flow data confirmed a sharp dip in outflows compared to Friday, providing further confirmation of reduced sell pressure. The shift to bullish expectations was also observed in the derivatives segment.
TON’s futures open interest registered its highest surge observed in 3 months on Friday. A confirmation of investor conviction especially as price pushed further into the tight squeeze zone.
The last time that Toncoin open interest was in February and it also confirmed that many investors have been watching the cryptocurrency.
While the bullish sentiment was on the rise, the open interest spike also highlighted the rising risk of liquidation if price breaks below the ascending support level. That outcome could trigger capitulation especially as June sentiment tanks due to the expectations of economic disruption.
The Toncoin fear and greed index was neutral (49) at press time after sliding by 17 points in the last 24 hours. While this was a bit of a reversion to the mean compared to its weekly sentiment, it also highlighted the rising risk of further downside.
What can performance metrics reveal about TON crypto prospects?
As far as network performance was concerned, TON coin experienced a surge in DEX volume in the last week of May. This also aligned with positive address growth observed in May.
The total number of holders grew from 149,930 addresses to over 150,200 addresses in the last 4 weeks according to IntoTheBlock data.
Moreover, whales were the majority holders, controlling over 67% of Toncoin supply. Addresses by time held revealed that cruisers or swing traders accounted for more than 82.5% of the coins in circulation.
Confirmation that they at least expected an uptrend in the short to midterm, which was in line with the expectations of more than 40% upside.
Long term holders accounted for just below 15% of the total holder categories while traders only accounted for 2.8%.
Meanwhile, spot trading data across multiple exchanges flashed high levels of confidence at recent price levels.
The problem with the rising optimism is that, while it may eventually lead to a price surge, an unexpected wave of sell pressure could occur. This is because the bullish expectations often trigger high appetite for leverage, and this encourages whales to trigger liquidations by moving in the opposite direction.
In other words, bullish expectations may end up being crushed by an unexpected capitulation event if the coin fails to attract enough demand for a rally. This potential outcome may force TON crypto to retest its next support level just below $2.8.
