Toncoin Bullish Weekend Signals Potential For 250% Rally
NOIDA (CoinChapter.com)— Toncoin had a bullish rally over the weekend, which saw the native TON token rally more than 23% to reach a daily high near $6.2 on May 6. However, the token fell prey to profit booking and dropped 5% in a day.
The TON token broke into the list of top 10 crypto tokens by market cap, overtaking Cardano, thanks to the project’s market cap reaching $20.3 billion. In comparison, Cardano’s recent struggles to remain relevant failed to revive its token, with the project’s market cap dropping to $16.4 billion.
Integration with the messaging app Telegram in April earlier this year, initiatives to enhance community engagement, and the potential of a Telegram IPO in March 2024 were some of the bullish cues that helped TON price spike over 170% YTD.
Now, a bullish technical setup could help the TON price register more gains if it attracts buyers.
TON Price Form Bullish Pennant
The Toncoin token price formed a bullish technical pattern called the ‘bull pennant.’
The bull pennant pattern signals a potential continuation of an upward trend. It forms when the price of an asset consolidates in a narrow, tapering range following a strong upward movement, resembling a small triangular flag.
The pattern comprises two converging trendlines that connect the high and low prices of the consolidation phase. During this phase, trading volume typically decreases, reflecting market indecision.
For the pattern to validate a bullish continuation, a breakout above the upper trendline should occur, accompanied by a significant increase in volume. This surge in volume indicates strong buying pressure. This would reinforce the likelihood of continued upward momentum.
If the volume does not increase significantly at the breakout, there’s a higher risk that the price will retreat back into the pennant. This would indicate a false breakout and potential reversal.
Per the rules of technical analysis, if the TON price breaks out of the bull pennant, it can theoretically target a price level nearly 256% higher than its current prices, meaning a price target near $21.
Bears Pare TON Gains
Meanwhile, profit booking forced the Toncoin price to pare gains on May 6. Bulls are likely eyeing the 20-day EMA (red wave) as a potentially key dynamic support level. Hence, breaking below the EMA trendline could erode investor confidence in the TON price’s bullish weekend rally.
As such, TON price could drop to the support near $5.53. Moreover, breaching the immediate support level might force TON price to test the support near $5. This is a price level that bulls have defended multiple times since March this year.
On the other hand, the relative strength index for TON remained neutral, with a score of 53.6 on the daily charts. The RSI that Toncoin has some breathing room if it manages to start a bullish rally before the RSI becomes overbought and signals a bearish reversal.
A bullish uptrend would see TON price rise to the resistance near $6.4. Moreover, breaking and consolidating above the immediate resistance could help Toncoin price continue its bullish weekend rally and target the resistance near $7.
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