Toncoin’s Rally: Will it Last?

Toncoin has been making waves in the crypto exchange market lately, raising the question: can it keep up the pace? With funding rates hitting record highs, traders are eyeing the $7 resistance level closely. Let’s dive into the mix of Toncoin’s price action, funding rates, and what they mean for short-term trading.

Understanding Toncoin’s Recent Action

Toncoin, the cryptocurrency for The Open Network (TON), has kept its bullish momentum alive this week, extending its strong performance from November. The latest price action has pushed the coin above its November highs, but is it hitting a wall?

The Role of Funding Rates

This recent uptick in Toncoin’s price was marked by a consistent demand wave over the last four weeks. This was reflected in the positive funding rates, which show that derivatives traders have been betting on the price going up. For those engaged in crypto trading in the US, funding rates are crucial. They can eat into profits, especially if you’re holding long positions and have to pay fees to short position holders.

Despite this bullish funding narrative, Toncoin’s open interest (OI) has been somewhat lukewarm at $267.5 million. It’s a decent amount and a respectable gain over the past month, but it’s not as strong as what we saw back in August. So, while the demand looks good, it might not be as robust as it seems.

Price Resistance: A Tough Hill to Climb

Even though Toncoin is continuing its November momentum, a pullback might be in the cards. The latest demand wave pushed it to $7.19, but sell pressure quickly followed. The $7 level has been a resistance in the past, and it seems like we’re seeing a similar pattern now.

The fact that the recent demand wasn’t as strong as August’s adds to the potential challenges. There’s a high chance that demand will start to cool off, especially since Toncoin was overbought after its latest push. Traders need to be on their toes and factor in these resistance levels as they plan their short-term trading moves.

On-Chain Data: A Mixed Bag

The number of addresses on TON rocketed to 67,680 as of November 4, the highest ever recorded. Address stats can give hints about holder behavior. The number of addresses with zero balances has surged in the last three weeks, suggesting more addresses sold off their holdings as prices went up.

However, on-chain data hasn’t shown strong network activity, which could have added some bullish confidence. For example, the network’s stablecoin market cap dipped slightly from its peak in November. The Total Value Locked (TVL) in the network also had a tough time gaining traction, dropping from over $777.1 million in July to $358.56 million as of December 3.

That said, there was positive volume growth since late November, which reflects the ongoing bullish momentum. But on-chain metrics haven’t provided much to support a strong bullish case for Toncoin. More upside could happen if market conditions stay favorable. Traders should keep a close eye on these metrics to adjust their strategies.

Summary: What’s Next for Toncoin?

In short, Toncoin’s rally is facing a hefty resistance at $7, with funding rates reaching three-month highs. While positive funding rates show bullish sentiment, weak open interest and on-chain data suggest demand may not be as strong as it appears. Traders should take these elements into account when crafting their short-term trading strategies in the crypto exchange market. Toncoin’s future will hinge on sustained demand and market conditions, but expect some pullbacks along the way.