2024-04-09 13:04:48
- TON divergence did not see a deep pullback due to high demand.
- There was a possibility of a short-term reset of Toncoin prices.
toncoin [TON] is on a stellar streak, gaining 28% in just over a day. In doing so, it also broke a key resistance level of $5.5 and established a bullish continuation on the price chart.
AMBCrypto technical analysis showed that while the long-term outlook was bullish for Toncoin, the futures market was overheated. There might soon be a wave of overleveraged futures speculators.
The breakout occurred with high trading volume, which reinforced bullish sentiment.
Source: TON/USDT on TradingView
Toncoin has a strongly bullish bias on the one-day chart. It also saw an increase in trading volume when it broke through the $5.68 level. Over the past two weeks, the $5.55 level has been a local resistance for TON.
The RSI had also formed lower lows over the past month (orange) as the price attempted to rise. This bearish divergence did not cause prices to fall below the $4.77 levelwhich was just the 38.6% Fibonacci retracement level (pale yellow).
Typically, a retracement reaches 61.8% or 78.6% levels. In this case, the strength of the buyers did not allow a deeper pullback. This was evident by the increase in OBV. The next targets for the bulls are $7.15 and $8.05.
There were signs of overextension
The strong bullish momentum that swept through the cryptocurrency market on April 8 saw TON surpass the $5.55 resistance and reach $6.4. AMBCrypto noted that the cumulative liquidation level delta was hugely positive.
This meant that long positions far outweighed short positions. In turn, this implied that a move lower would lead to many more sell-offs and cause more pain in the market.
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This might also be a healthy reset of the excess speculative interest behind TON. The liquidation level chart showed that $7.43 was an interest level that might be surpassed before a recession.
The $6.41 and $6.27 levels might be visited before a bullish reaction.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
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This is an automatic translation of our English version.
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