- Toncoin has risen to its highest in over a year.
- Price has risen to overbought; hence, a drawback is on the horizon.
In a significant surge in the last month, Toncoin [TON], the cryptocurrency linked to the popular messaging app Telegram, has soared to its highest value since February 2022, according to data from CoinMarketCap.
At press time, the altcoin exchanged hands at $2.68, up by almost 50% in the last month. While the altcoin’s value has grown steadily in the last month, most of the gains came in the past two days.
The cause of this can be attributed to Pavel Durov, the founder of Telegram, who, on 7th November, announced the giveaway of 10,000 premium subscriptions for his messaging app.
Durov specified in his announcement that he procured the premium accounts using TON tokens, totaling around $200,000.
As a result, during the intraday trading session on 8th November, TON’s price increased by 8.4%, briefly overtaking leading meme coin Dogecoin [DOGE] in terms of market capitalization.
As expected, Durov’s announcement led to a surge in demand for TON. Data obtained from Santiment showed that the daily count of unique addresses involved in TON transactions has risen by 46% since 6th November.
Likewise, the number of new addresses created to trade TON daily has increased by over 70% during the same period.
This showed that apart from the growth in demand for TON by already-existing addresses, there has been a higher volume of new demand for the altcoin in the past few days, hence the price rally.
A TON-around imminent?
An assessment of TON’s price movements in a daily chart revealed that the increased trading activity in the past two days pushed the token’s key momentum indicators to overbought highs.
At press time, its Relative Strength Index (RSI) and Money Flow Index (MFI) were 80.11 and 87.75, respectively.
An RSI reading above 70 and an MFI reading above 80 are often considered overbought levels. This indicates that the asset’s price may have risen too quickly, and a reversal or correction could be imminent.
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Also, the gap between the upper and lower bands of TON’s Bollinger Bands indicator widened following Durov’s announcement.
Typically, a widening gap between the upper and lower bands suggests that price movements are experiencing significant volatility. Traders often interpret this to mean that the market is becoming increasingly unpredictable. There is also a potential for large price swings.