Toncoin (TON) investors have seen a glimmer of hope in recent days after the token experienced a sharp 25% price bounce in just four days. However, despite this short-term optimism, many are questioning whether this rally is truly the start of a new bullish trend or if it’s simply a “dead cat bounce” – a temporary recovery in a longer-term downtrend.

The past several weeks have not been kind to Toncoin holders, with data showing that an overwhelming 96% of TON holders are currently at a loss. Despite this, the token has seen some positive movement, with high trading volumes accompanying the recent bounce. But does this momentum have staying power, or is it just a fleeting blip on a largely bearish chart?

Short-Term Bounce, Long-Term Bearish Pressure

While Toncoin’s short-term price increase has provided some relief, the overall market structure remains bearish. Despite the recent gains, Toncoin has failed to break the significant resistance levels that have kept it trapped in a downward trend.

A closer look at Toncoin’s daily chart reveals that the token remains in a bearish market structure. Despite a strong volume spike and a brief uptick in the On-Balance Volume (OBV), suggesting some buying activity, the token’s price remains well below critical resistance points.

A critical resistance level for Toncoin is around $3.85, a price point that could act as a key area for a potential bearish reversal. If the token struggles to surpass this price level, it could signal the end of the current rally and a return to the downtrend.

Is $3.6 the Ceiling for Toncoin?

Looking at the broader picture, the price bounce has been impressive, but how much higher can Toncoin climb before encountering significant resistance? According to technical analysis, the $3.6 level is a major point of interest. This price could represent the peak of the recent rally before a larger correction sets in.

Toncoin’s price chart reveals that the token could face a tough battle around this level. The $3.6 mark has been identified as a liquidity zone, one of several price levels where large buy and sell orders are concentrated. This suggests that any attempt to push past $3.6 might be met with strong resistance from sellers, making it a likely area for a reversal.

The Role of Liquidity in Toncoin’s Price Action

Examining the liquidation heatmaps for Toncoin sheds more light on the potential price action. These heatmaps show where liquidity pockets exist, indicating where large volumes of buy and sell orders are concentrated. These levels often act as critical zones where price reversals can occur.

The heatmap for Toncoin’s 1-month chart highlights two key liquidity zones: $3.66 and $3.9. The $3.66 level is particularly interesting as it aligns with the highs seen earlier this past weekend. This level could serve as a major resistance point if Toncoin continues its climb. If the price struggles to breach this point, it could signal the beginning of a bearish reversal.

The Case for a Bearish Reversal

Despite the recent price action, the chances of a sustained rally are relatively slim. The broader market structure still leans heavily toward the bearish side, and the key resistance zones are likely to present a strong challenge to Toncoin’s price.

If Toncoin fails to break past the critical resistance levels, particularly around $3.85 or higher, the token could quickly resume its downtrend. The $3.2 level, identified in the 1-week heatmap, could serve as a potential target for short-term traders looking for a retracement in the near future.

Moreover, the 1-week heatmap shows that liquidity around the $3.2 and $3.6 levels is significant. As Toncoin approaches these levels, the token is likely to face heightened selling pressure, which could lead to a reversal. For swing traders, this presents an opportunity to monitor for a price drop to $3.2 before considering a potential buy-in.

What’s Next for Toncoin?

Given the current market dynamics, Toncoin faces a difficult road ahead. While the recent price bounce may have provided some hope for bullish investors, the broader trend remains downward. Toncoin’s inability to break through key resistance levels suggests that the token is likely to face additional pressure in the coming weeks.

For those holding Toncoin, it’s essential to remain cautious and aware of the resistance levels at $3.6 and $3.85. If these levels fail to hold and Toncoin is unable to break through, the token could face a significant drop, potentially revisiting the lower levels seen in previous months.

However, should Toncoin manage to surprise the market and sustain its rally beyond $3.7, it could indicate that a more substantial trend reversal is underway. In that case, the $4.5 zone would likely be the next major resistance point, but such a move would require consistent buying momentum and a shift in market sentiment.

Conclusion

Toncoin’s recent 25% bounce may offer a glimmer of hope for investors, but it’s important to remain cautious. The token faces significant resistance at key price levels, and the prevailing bearish market structure suggests that the rally could be short-lived. For now, traders should keep an eye on the $3.6 and $3.2 levels for signs of further price action and potential reversals. As always, Toncoin’s future will depend on how it navigates these crucial support and resistance zones in the coming days.

Will Toncoin’s short-term rally be enough to turn the tide, or will the bearish pressure prevail once again? Only time will tell.