Toncoin (TON) Faces Demand Challenges: Could a Break Above $5.35 Signal a Potential Rebound?

• Toncoin (TON) is currently facing weak demand conditions as large holders show signs of reducing their investments.
• The lack of accumulation from both retail and institutional investors has contributed to bearish market sentiments surrounding the altcoin.
• Experts caution that unless TON overcomes its immediate resistance level at $5.35, we may witness a significant price decline of about 17%.

This article delves into the recent performance of Toncoin, examining factors impacting its demand and providing insights into potential price movements in the near future.

Toncoin’s Struggle Amid Declining Demand

In recent weeks, Toncoin has experienced a mild price increase of approximately 1%, aligning with the general positive trajectory of the cryptocurrency market. However, despite this slight uptick, the overall demand for Toncoin remains considerably lackluster, particularly among larger investors or ‘whales’, as well as the broader retail market.

Investor Sentiment and the MVRV Ratio

A closer look at Toncoin reveals that its market value to realized value (MVRV) ratio has been painting a troubling picture. Currently, the 30-day and 90-day MVRV ratios stand at -0.26% and -5.38%, respectively. Such negative MVRV ratios can typically signal a potential buying opportunity, as they indicate that the asset is trading below its historical acquisition cost. Nevertheless, this indication has not spurred an increase in accumulation from investors.

According to the analysis by Santiment, the downward trend in Toncoin’s MVRV suggests that many holders are currently facing losses, yet they have shown little interest in bolstering their positions, exhibiting an overall pessimistic outlook on the altcoin’s prospects.

Movement Among Large Holders and Short-Term Investors

Significantly, Toncoin’s large holders have exhibited a dramatic decline in netflow by approximately 115% over the past week, despite the coin’s modest price increase. Larger holder activity is often a critical market sentiment indicator, and a decrease in their netflow points to a shift towards offloading assets, raising concerns over potential downward price pressure.

Meanwhile, short-term holders (STHs) have also shifted their strategies, reducing their average holding duration by 7% over the past month. STHs typically engage in quick trades, often reacting promptly to market conditions. This trend signifies a retreat from price speculation, indicating a growing wariness among traders regarding Toncoin’s near-term viability.

Projected Price Movements and Market Outlook

As it stands, Toncoin is trading just below the critical resistance level of $5.35, at $5.33. Analysts suggest that if substantial buying pressure does not materialize from whales and STHs, the likelihood of surpassing this resistance becomes increasingly improbable.

Should the price fail to break through this resistance threshold, projections indicate a possible decline of around 17%, which could drive the price down to approximately $4.44, reminiscent of levels last observed on September 6. Conversely, if demand picks up and market sentiment improves, Toncoin could potentially rally towards the $6.81 level, validating previous resistance trends.

Conclusion

In summary, the prevailing indicators suggest that Toncoin is mired in a bear market characterized by weak demand and selling pressures, predominantly from large holders and short-term investors. For the altcoin to regain bullish momentum, overcoming the resistance at $5.35 is essential. Investors and analysts alike will be closely monitoring market dynamics, as shifts in sentiment could dramatically influence Toncoin’s trajectory moving forward.