Toncoin (TON) Forms Descending Channel, Targeting $6

Toncoin (TON), one of the leading digital assets and top-performing tokens in the first half of 2024, has formed a descending channel

Toncoin (TON), one of the leading digital assets and top-performing tokens in the first half of 2024, has formed a descending channel, also called a bearish channel with a potential target of $6 in the bullish case and $2 in the bearish case.

A bearish channel is a technical pattern formed when an asset’s price is consistently making lower highs and lower lows, indicating a downtrend.

As seen in the image below, this pattern is characterized by two parallel downward-sloping trendlines: the upper trendline acting as resistance and the lower trendline as support. A breakout can occur in either direction.

At press time, Toncoin trades at $2.66, experiencing a 4.18% increase in the past 24 hours. The price is near the lower boundary of the descending channel.

If TON breaks out above the resistance at $3, the target is calculated by measuring the height of the channel and adding it to the breakout level. Based on historical price action, the expected target is around $3.80–$4.

Notably, a strong bullish rally beyond $4 could push it toward $6, but that would require additional confirmation signals like increased volume and a stronger RSI recovery.

On the other hand, if TON breaks below the lower trendline at $2.50, the downside target range is around $1.50–$1.80 based on the height of the channel.

According to prominent analyst Ali Martinez, 140,000 TON have been moved to exchanges in the past week. Usually, an increase in supply on exchanges suggests potential selling pressure, as investors may be preparing to offload their holdings.

Using a chart, Martinez highlighted the increased exchange inflows which indicate that some investors may be taking profits or bracing for further downside. If selling pressure continues, the likelihood of a break below $2.50 increases, supporting the bearish case above.

Despite price weakness, Toncoin’s blockchain activity remains strong. According to its latest blog post which provides an insight into the developers for Jan-Feb, over 3.1 million new wallets were activated with 170,000–590,000 daily active wallets.

Also, the monthly trading volume stood between $500 million and $700 million with over 20 million to 30 million weekly transactions, ranking TON among the top 8 blockchains.

Further, a 40% increase was seen in the monthly active developers with 906 individuals contributing to the growth of TON.

Manuel “Manny” Stotz, the new president of TON Foundation, is now leading TON’s expansion in the United States. Stotz has been on the board since 2023 and also founded Kingsway Capital, a firm that invests in early-stage companies in the blockchain.