Toncoin (TON), associated with Telegram, has experienced a modest 1% price rise this past week. However, this increase is simply reflective of the overall market trend, as it has not seen substantial interest from whales or retail investors.
The altcoin faces the risk of a double-digit decline in the near future if demand remains tepid. This report delves into the reasons behind this forecast.
Toncoin Investors on the Sidelines
Toncoin’s market value to realized value (MVRV) ratio, which assesses the overall profitability of its holders, indicates that the altcoin has been undervalued in recent weeks. As of now, the token’s 30-day and 90-day MVRV ratios sit at -0.26% and -5.38%, respectively.
Historically, negative MVRV ratios have been seen as a buying signal, indicating that the asset is trading below its historical acquisition cost and may be ready for a rebound. Nevertheless, this has not spurred Toncoin investors to increase their holdings.
Read more: What Are Telegram Bot Coins?
In the last week, the netflow of Toncoin’s large holders has drastically dropped by 115% despite a nominal 1% price increase. Large holders, or wallets overseeing more than 0.1% of the circulating supply, are critical to understanding market dynamics. The netflow they generate, representing the difference between purchases and sales over a specific timeframe, provides valuable insight into market sentiment.
A decline in large holder netflow generally suggests that these whales are liquidating their assets, which serves as a bearish indication pointing to potential selling pressure and price drops.
Moreover, Toncoin’s short-term holders (STHs) have also been shortening their holding durations, elevating the risks of a price drop. Data from IntoTheBlock indicates that their holding period has diminished by 7% over the last month.
STHs, who generally hold assets for under 30 days, may opt to sell in order to secure profits or minimize potential losses from an anticipated price drop. A decrease in STH holdings typically hints at diminished demand, further exerting downward pressure on the asset’s price.
TON Price Forecast: Imminent Double-Digit Decline
As things stand, Toncoin is priced at $5.33, slightly below the resistance level of $5.35. If large holders and STHs continue to decrease their stakes, breaching this resistance will become increasingly unlikely.
Failing to overcome this barrier may lead to a 17% drop, pushing Toncoin’s price down to $4.44, a level last recorded on September 6.
Read more: 6 Best Toncoin (TON) Wallets in 2024
On the flip side, should market sentiment improve and demand for Toncoin increase, it might successfully breach the $5.35 resistance and surge towards $6.81.
Disclaimer
In accordance with the Trust Project guidelines, this price analysis article serves solely for informational purposes and should not be interpreted as financial or investment advice. BeInCrypto is dedicated to providing accurate, unbiased reports; however, market conditions can change without warning. Always conduct thorough research and seek professional counsel before making any financial choices. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
