Toncoin's [TON] 19.54% monthly rally has positioned it as the top-performing high-cap asset

Toncoin's [TON] 19.54% monthly rally has positioned it as the top-performing high-cap asset. However, its brief deviation above the $4 level faced swift rejection, indicating potential local exhaustion.

Toncoin's [TON] impressive 19.54% monthly rally has catapulted it to the top of the high-cap performers. However, its brief attempt to break above the $4 resistance level faced swift rejection, hinting at local exhaustion.

On the other hand, a shift in market sentiment is evident, transitioning from anxiety to denial. In the context of market psychology, denial occurs when participants disregard early signs of trend exhaustion, anticipating further continuation.

With this in mind, can Toncoin prevent a mass capitulation and set the stage for a strong supply squeeze, or is the current rally setting up for distribution?

Current market standing: Battling $4 resistance

As seen on the 1D price chart, Toncoin bounced back to test the $2.45 zone, a key liquidity level last touched in March 2024. The subsequent recovery was swift, but the $4 barrier has proven to be a strong determinant of price trends.

The latest breakout attempt saw TON pierce through $4, but sellers quickly stepped in to absorb the liquidity. This rejection, despite the absence of clear overextended signals, underscores local distribution dynamics.

Consequently, shorts were able to capitalize, leading to the forced liquidation of $340 million in open positions. This mass liquidation event, also known as a "de-leveraging event," contributed to the pullback that brought TON back to $3.80 at the time of writing.

Now, as the price is staging another push toward $4, the $3.93 supply zone becomes a pivotal level, where 5.18 million addresses have a combined holding of 795.50 million Toncoin.

A rejection at this zone could catalyze a cascading sell order, putting 3.12 billion TON at risk of distribution.

If there's a failure to sustain bullish momentum, it might induce another short squeeze, ultimately extending consolidation within a liquidity trap.

However, there's a silver lining. The market sentiment is shifting into the denial phase. This poses a big question: will TON investors exhibit the conviction needed for a breakout, or is a deeper re-accumulation phase inevitable?

Assessing Toncoin's next move: HODL or capitulate?

Currently, whales hold a dominant 66.77% of Toncoin's total supply, making their actions a key market signal. Over the past week, whale net inflows surged by an incredible 2159.82%, a clear indication of significant accumulation.

This accumulation aligns with Toncoin's breakout from its $3.35 consolidation range, suggesting increased buy-side interest.

The sharp uptick in whale activity suggests that large holders are positioning for a continuation of the bullish trend, potentially disregarding any signs of trend reversal.

If this pattern holds, even after a retest of $3.93, a move past the $4 resistance zone appears increasingly probable, especially with a 7.70% increase in Open Interest (OI) in the derivatives market.

However, failure to maintain support at $3.93 could trigger cascading liquidations, putting the current open positions at risk.

To confirm a move above $4, capitulation must be absorbed. While the prevailing signals are bullish, monitoring these critical levels closely will be crucial in the near term.