Toncoin’s (TON) price has been doing well mostly after escaping its downtrend, but its rally may end soon.
This is because the sudden surge resulted in the market overheating, which, if continued further, will create a market top.
Toncoin Has Very Little Wiggle Room
The investors noted considerable gains due to the recent rally in Toncoin’s price, which has kept their optimism up. However, the cryptocurrency might be close to witnessing a reversal, resulting in consolidation or correction.
This is because, according to the total supply in profit, TON is close to hitting a market top. A market top indicates the highest point of a market’s upward trend before a potential reversal. This is generally noted when more than 95% of an asset’s supply is profitable.
Toncoin Supply in Profit. Source: Santiment
Over 90% of all circulating TON is bearing profits, bringing it close to satisfying the above-mentioned conditions.
Furthermore, the asset is currently overvalued according to the short-term Market Value to Realized Value (MVRV) ratio. The MVRV ratio assesses investor profit or loss. Toncoin’s 7-day MVRV sits at 5.2%, signaling profits, potentially prompting selling. Historically, TON corrections occur within the 4% to 12% MVRV range, labeling it a danger zone.
Read More: What Are Telegram Bot Coins?
Toncoin MVRV Ratio. Source: Santiment
Thus, being overvalued, TON has little opportunity to rise here. This could lead to corrections as the market cools down.
TON Price Prediction: Another Short Rally Before a Dip
Toncoin’s price could still see some rise should it close above the $6.04 support level. This level has been tested in the past and generally leads to an increase in price. However, this increase would be halted at the resistance level of $6.50.
This is because by then, TON would validate the market top and be well into the danger zone of the MVRV ratio. Consequently. Toncoin’s price would likely fall back down to $6.0 or lower to $5.4.
Read More: Which Are the Best Altcoins To Invest in May 2024?
Toncoin Price Analysis. Source: TradingView
However, if TON holders choose not to sell and HODL instead, the altcoin could breach $6.5. This would invalidate the bearish thesis, enabling Toncoin’s price to note further gains.
The post Toncoin (TON) Set to Face Correction Once It Reaches This Price appeared first on BeInCrypto.