Toncoin (TON), the cryptocurrency linked to Telegram, is currently facing challenging market conditions, with weak demand and large holders scaling back their positions. Despite a minor 1% increase over the past week, the outlook for TON remains uncertain, as investor sentiment has been lukewarm, with both whales and retail investors showing limited interest. As a result, the altcoin may be headed for a significant decline unless it manages to break through its $5.35 resistance level.
Weak Demand and Investor Hesitation
Toncoin’s struggle to gain traction is evident in its market value to realized value (MVRV) ratio, which is used to gauge the profitability of its holders. As of now, Toncoin’s 30-day MVRV ratio stands at -0.26%, while its 90-day MVRV ratio is -5.38%. Negative MVRV ratios typically indicate that an asset is undervalued, often seen as a buying signal. However, despite these historically favorable conditions, investors have refrained from accumulating the altcoin.
The lack of enthusiasm from investors can be attributed to a broader bearish trend affecting the market. Large holders, often referred to as “whales,” play a critical role in influencing price movements. Over the past week, Toncoin’s large holders’ netflow has plummeted by 115%, indicating that these key players are reducing their positions. This signals a bearish outlook as selling pressure increases, potentially leading to a price drop.
Read more:Toncoin Crashes 14%, But Smart Investors Are Piling In—Should You?
Short-Term Holders Add to Selling Pressure
Adding to Toncoin’s woes, short-term holders (STHs) have also reduced their holding time. STHs typically hold assets for less than 30 days and may sell to lock in profits or avoid potential losses. According to recent data, the holding period of STHs in Toncoin has decreased by 7% over the last month, further amplifying the risk of a downturn. As STHs liquidate their positions, the demand for Toncoin diminishes, increasing the likelihood of downward price pressure.
Read more:LToncoin Whales Accumulate Millions—Is a Breakout to $6.75 on the Horizon?
Price Prediction: A 17% Drop on the Horizon?
Currently, Toncoin is trading at $5.33, hovering just below a critical resistance level at $5.35. If the demand for TON remains weak and large holders continue reducing their exposure, breaking through this resistance may prove difficult. Failure to surpass the $5.35 level could trigger a significant price drop, with a potential decline of up to 17%, bringing the price down to $4.44 — a level last seen in early September.
Is There a Path to Recovery?
Despite the bearish outlook, there is a possibility for a bullish turnaround if market sentiment improves and demand for Toncoin rises. If TON manages to break through the $5.35 resistance level, it could rally toward $6.81, providing investors with renewed optimism. However, this scenario hinges on a shift in market dynamics and increased accumulation by both retail investors and large holders.
Read more:Hamster Kombat Airdrop Sparks Toncoin Frenzy: 300 Million Players Cash In!
Conclusion
Toncoin’s future remains uncertain as it struggles to gain traction in a bearish market environment. With large holders reducing their positions and short-term holders exiting the asset, the altcoin faces the risk of a 17% drop unless it can break through its $5.35 resistance. While there is potential for a bullish rally, the current market conditions suggest that Toncoin’s immediate outlook remains cautious. Investors should keep a close eye on market trends and key resistance levels as TON navigates this volatile period.
