Toncoin Faces Three Technical Risks That Could See It Have a Bearish Reversal in the Coming Weeks

Toncoin has been a big winner in the crypto industry this year as it climbed up the ladder to become the eighth-biggest coin.

Toncoin (CRYPTO: TON) has been one of the biggest gainers in the crypto industry this year, climbing the ranks to become the eighth-biggest coin. It has soared by over 246% this year and by 455% in the past 12 months, beating the likes of Cardano (CRYPTO: ADA) and Ether (CRYPTO: ETH).

Toncoin’s encouraging metrics

Toncoin has had strong fundamentals behind it. Telegram, its ‘parent company’, has grown to become a leading social media firm with almost a billion users. At the same time, the TON Blockchain has become the 10th biggest chain in the world, overtaking the likes of Optimism (CRYPTO: OP), Sui (CRYPTO: SUI), Cronos (CRYPTO: CRO), and Mantle (CRYPTO: MTL).

In parallel, Toncoin has benefited from the ongoing tap-to-earn boom that has seen the likes of Hamster Kombat, TapSwap, and Notcoin attract millions of users globally.

Other strong on-chain metrics have been evident in Toncoin. Data by Tonstats shows that the fees collected by the network rose to their highest level since May while the number of transactions per day moved to over 5.77 million.

Other on-chain metrics like the number of on-chain wallet activations and monthly active wallets have also risen in the past few days.

Still, despite these numbers, the Toncoin price faces three technical risks that could see it have a bearish reversal in the coming weeks.

Rising wedge, low volume, and bearish divergence

First, as shown above, the TON price has formed a rising wedge chart pattern, which I have indicated in green. This pattern is formed when an asset’s price moves upwards in a narrowing range. It is characterised by two converging trendlines and decreasing volume.

In most cases, a rising wedge leads to a bearish breakout when the two lines near their convergence, which is about to happen. If the pattern works well, it means that the TON price could drop to the psychological point at $5.

Second, Toncoin price has also formed a bearish divergence pattern, as shown in the MACD and Relative Strength Index (RSI) indicators above. While TON has been in a steady rise, the two indicators have constantly made a downward trend. Like the wedge pattern, a bearish divergence leads to a bearish breakout over time.

Finally, TON’s daily traded volume has been a bit weak compared to its market cap. As shown above, the daily volume has been less than $300 million in the past few weeks. While this is still a huge sum, it is smaller than that of smaller tokens like Pepe (CRYPTO: PEPE) and Dogwifhat (CRYPTO: DOG). Lower volume means that the recent rally had limited breadth.

Altogether, these risks mean that the TON price is at risk of more downside unless it sees a strong catalyst in the coming weeks.