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Toncoin (TON) loses ground amid increased profit-taking

Pink coin Toncoin (TON), the cryptocurrency tied to the popular messaging app Telegram, hit its year-to-date high of $7.54 on June 6. However, its value has since declined. It was trading at $7.03 at press time.

As demand for the altcoin continues to decline, its price still risks falling below the $7 price level.

Demand for Toncoin decreased last week

The 7% decline in Toncoin (TON) price since hitting its year-to-date high is due to a decline in buying momentum last week. This is confirmed by the observed decrease in TON's daily active addresses and the number of new addresses over the past week.

During this period, the number of active addresses that made at least a ton of transactions decreased by 10%. Likewise, the number of new addresses created daily to trade TON decreased by 19% during this period.

Toncoin network activity
Toncoin network activity. Source: entolebloc

When an asset experiences such a drop in user demand, it increases the risk of a further price decline. This is because it discourages new users from entering the market and existing users from actively trading the crypto asset.

Additionally, the bearish Relative Strength Index (RSI) for TON, as observed on-chain, confirmed the increasing selling pressure. At press time, this indicator was trending downward and returned a value of 58.

Read more: Telegram grew from a messaging app to a crypto empire

Toncoin Relative Strength Index
Toncoin RSI. Source: Feeling

An asset's RSI measures the momentum of its recent price movements. It typically ranges from 0 to 100, with values ​​above 70 indicating the asset is overbought and values ​​below 30 indicating it is oversold.

TON Price Prediction: Price Aims for Support

TON has been moving in an ascending channel since May. An ascending channel is a bullish signal that forms when an asset's price makes higher highs and higher lows.

It is characterized by two lines sloping upward: the upper trend line, which represents resistance, and the lower trend line, which forms support.

TON faced resistance at $8.64 and found support at $6.8. At $7.03 and below as of this writing, TON appears poised to fall to and below the support level.

Readings of the altcoin's Moving Average Convergence/Divergence (MACD) indicator indicate this possibility. As of press time, TON's MACD line (blue) should cross below the signal line (orange).

Toncoin analysis. Source: Commercial view

This indicator identifies changes in asset price dynamics and potential trend reversals. A bearish crossover of the MACD line with the signal line is considered a bearish crossover. It is a signal that often precedes a downward trend in the price of an asset. Traders interpret it as a sign to exit buy trades and open sell trades.

If this happens and the bears regain full control of the market, TON price could fall to $6.41 below support.

Toncoin Analysis
Toncoin analysis. Source: Commercial view

However, if invalidated, the altcoin could surge up to $7.01 and head towards resistance.

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