Toncoin (TON) price has faced significant downward pressure recently as broader market pessimism weighs on the crypto.

Over the past few days, TON has seen a significant drop, and the outlook looks bleak as the cryptocurrency is on the verge of a Death Cross.

Toncoin may start a downtrend

Toncoin is approaching a Death Cross, a bearish signal that occurs when the 50-day Exponential Moving Average (EMA) crosses below the 200-day EMA. As such, this pattern is often seen as a strong indication of a prolonged downtrend.

In short, when a Death Cross forms, it suggests that recent price momentum has been negative and the market may face further downward pressure.

The heightened bearish sentiment is already evident in Toncoin’s price action. With the 50-day and 200-day EMAs aligning to form this pattern, the potential for a significant price drop is growing.

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Toncoin Death Cross. Source: TradingView

From a macro perspective, the Network Value to Transactions (NVT) Ratio is providing additional bearish signals for Toncoin. In short, the NVT Ratio measures the relationship between the network’s market capitalization and total transaction volume. Currently, the NVT Ratio for TON is at a seven-month high, suggesting that the network’s value is inflated compared to its transaction activity.

Historically, a high NVT ratio indicates that a cryptocurrency is overvalued and may be headed for a correction. With Toncoin’s NVT ratio at high levels, the market is signaling that the crypto may be headed for a price drop, especially with bearish technical indicators lining up.

Toncoin NVT ratio. Source: Santiment

TON Price Prediction

Toncoin has already experienced a 13% drop after failing to break above the $5.96 resistance level. The looming Death Cross further suggests that a continued downtrend is likely.

Thus, TON could see a drop below the $4.86 support level. Furthermore, a drop to $4.61, marking an 11% decline and a monthly low, could be on the horizon.

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Toncoin price analysis. Source: TradingView

The downtrend is likely to continue if TON fails to hold above $4.86. However, if the crypto manages to avoid this decline and the broader market turns bullish, there is a chance for a recovery. Toncoin could react and flip the $5.37 resistance into support, potentially invalidating the bearish outlook and recovering the recent 13% loss.

The article Toncoin may have a prolonged decline if bearish pattern is confirmed – Analysis was first seen on BeInCrypto Brasil.