Toncoin (TON), linked to Telegram, has lost nearly 10% of its value in the past week, indicating potential market weakness. The downward trend approaches the lower boundary of its horizontal channel, establishing a critical support level since March. Current technical indicators suggest that if this support fails to hold, a further decline of double digits is possible.
Recently, Toncoin's funding rate remains largely negative, reflecting traders' skepticism regarding a short-term price recovery, currently at -0.0068%. The funding rate is a periodic fee that ensures the asset's contract price aligns with its spot price. A negative rate indicates a higher number of traders are shorting than going long, fostering downward pressure on prices.
With Toncoin's price decreasing alongside a negative funding rate, a cycle can emerge where falling prices lead to increased short trades, driving the value lower. An analysis of buying and selling pressures illustrates a bearish sentiment prevailing in the TON market. The Directional Movement Index (DMI) reveals that the positive directional indicator (blue) is below the negative directional indicator (red), signaling a greater number of downtrends than uptrends.
As of now, TON is priced at $5.34, trending towards its established support. It reached this line in early September but was unable to break below it, as buying power from bulls sustained the price. If the support holds, a rebound towards resistance at $7.96 could occur. Conversely, failing to maintain this support could lead to a drop of 17% to a low of $4.43, nullifying any bullish expectations.
Given the current market indicators, Toncoin (TON) traders should remain vigilant and assess their strategies based on the support level's performance.
