Toncoin: How profit-taking pressure can cap TON’s rally

Toncoin [TON] faced resistance at the $1.70 region over the past month. The bullish momentum many altcoins saw in the first week of January was inspired by Bitcoin’s [BTC] rally beyond $90k at that time.

While Bitcoin has managed to reclaim $94.5k as support, Toncoin has not exhibited much bullish momentum over the past week, having shed 1.29% over the past week.

In a recent AMBCrypto report, the importance of the $1.70 area was highlighted. A bullish breakout past this level could see a short-term rally ensue, the report concluded.

The on-chain metrics revealed a sizeable uptick in the 90-day MVRV ratio. Further price gains could be capped as holders take profits.

Open Interest had also surged, but the mean coin age was moving sideways. This was a reflection of a lack of network-wide accumulation, which translated to a lack of market conviction.

What the price charts reveal for TON holders

Source: TON/USDT on TradingView

The weekly trend was firmly bearish, as the DMI and the price action showed. The swing point for the bulls to beat on this timeframe was at $3.75, more than double the current market price.

A move beyond this level will signal a bullish long-term trend.

The OBV has not made new lows over the past two months, which was a slight encouragement. The $2.3-$2.4 and the $2.8 levels were the notable supply zones the weekly chart revealed.

Traders’ call to action: Go long and don’t forget to take profits

Source: TON/USDT on TradingView

The short-term bullish momentum was something traders could capitalize on. The OBV and the daily volume bars indicated a flurry of buying from the final week of December.

The imbalance and local supply zone at $1.70 has been flipped to support.

Swing traders can use this flip to buy TON. They need to be cautious and remember to take profits at $2.16 and $2.37, with a drop below $1.56 being invalidation.

Final Thoughts

• Toncoin’s on-chain metrics showed network-wide accumulation was not underway. 
• A rally to $2.0 and $2.37 appeared possible in the coming weeks, and swing traders must be ready to take profits during the move.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.