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Although the move is now reaching levels that have historically proven difficult to sustain, Toncoin recently produced one of the most explosive rallies in the cryptocurrency market. After a protracted consolidation range, TON surged into a nearly vertical breakout, quickly regaining all of the major moving averages and moving toward the $3 zone with hardly any discernible pullback.
Toncoin's stalemate is broken
TON traded in the $1.20 to $1.40 range for months, stuck in a gradual decline. Then, as volume skyrocketed and buyers rushed into the market, momentum abruptly quickened. In a matter of sessions, the asset shot through the 50, 100, and 200 EMAs, drastically altering the market's structure.
However, the move appears dangerously overheated at this point. RSI is the most obvious warning sign. Even for cryptocurrencies, TON's Relative Strength Index is currently at an extreme level, close to 93. In actuality, an RSI at this level typically indicates exhaustion as opposed to long-term upside continuation. Because buyers eventually run out and profit-taking pressure rises quickly, markets rarely sustain this level of momentum for very long.
TON needs a proper correction
That does not imply that the larger TON trend is over. It does indicate that the rally's current pace is getting erratic. In the past, strong volatility events have typically been preceded by RSI readings above 90. Occasionally, those occurrences completely reverse. Occasionally, they become forceful retreats before the trend picks back up. In any case, once momentum reaches this point, a cooling off is more likely.
In fact, TON would benefit from a temporary correction at this time. Due to the asset's excessively rapid movement, there were significant price gaps and minimal structural support beneath the rally. It would not be shocking to see pullbacks toward earlier breakout zones in the mid-$2 range, which could aid in market stabilization prior to another attempt at continuation.
As of right now, in terms of momentum, TON is still among the best assets in cryptocurrency. The asset is still receiving a lot of market attention, volume is still high, and the overall trend is still bullish. However, an RSI close to 93 is effectively a warning sign. The rally appears to be overheating, and if TON wants any chance of maintaining higher prices in the future, a brief pullback is likely required.
Dan Burgin
U.Today Editorial Team
