- The Sharpe ratio for TON has turned negative, indicating minimal rewards for its holders.
- TON faces a potential 18% decline if it does not achieve a bullish breakout from its current consolidation.
Toncoin [TON] has underperformed in comparison to Bitcoin [BTC] and various other altcoins over the past 30 days, following a 5% drop in its price. As of now, TON is trading at $5.28, with mild volatility obstructing substantial price movements.
Analyzing the Sharpe ratio reveals that current rewards for holders are notably low. At the latest update, this metric is negative and at its lowest point in the past month.
Source: CryptoQuant
A negative Sharpe ratio indicates that the risk associated with holding Toncoin outweighs the potential rewards. As TON continues to struggle to achieve meaningful gains, a persistently low and negative Sharpe ratio may dissuade interest in the token, leading to additional downward movement.
TON remains stagnant amid low market activity
According to TON’s one-day chart, the price has fluctuated between $5 and $5.40 over the past two weeks. Throughout this period, the Relative Strength Index (RSI) has stayed below 50, indicating insufficient buyer interest to trigger a breakout.
Source: Tradingview
Currently, TON’s RSI is at 47, indicating a predominance of sellers over buyers. The lack of buying activity presents a stark contrast to the larger market, where the crypto fear and greed index indicates substantial retail interest in crypto assets.
The absence of a notable breakout for TON, whether upward or downward, is also evident amid low volatility, as illustrated by the contracting Bollinger bands.
The token reached the upper band at $5.39 before hitting resistance. A successful break above this level could indicate the beginning of an upward trend.
Conversely, if Toncoin fails to break free from this consolidation, it could be at risk of a sharp 18% drop from its current price down to the 1.618 Fibonacci level ($4.28).
The increase in wallets holding Toncoin at a loss may contribute to this potential decline. Recent data from IntoTheBlock shows a 29% increase in such wallets over the past three weeks, now totaling 63%.
Source: IntoTheBlock
If these traders decide to cut their losses, it could heighten selling pressure and lead to further declines.
TON blockchain exhibits signs of recovery
The TON blockchain experienced a spike in activity in late September. However, since that time, both the number of active users and transactions on the network have dropped significantly.
Read Toncoin’s [TON] Price Prediction 2024–2025
Data from TokenTerminal indicates a slight recovery. On 20th October, daily active users on TON increased from 567,000 to 792,000, and the daily transaction count rose from 5 million to 5.7 million.
Source: TokenTerminal
An uptick in the usage of the network has previously been a precursor to growth. Thus, if this increase continues, it could rejuvenate bullish outlooks for Toncoin.
