Toncoin (TON) is attempting to recover after a sharp decline. Is this slight rebound the precursor to a bullish breakout, or just a temporary respite before another downward trend? Let's delve into the data to shed light on the future of this promising crypto.
The crypto market is rarely short of surprises, and Toncoin (TON), the native token of The Open Network, is no exception. After a period of significant bearish pressure that saw the token lose over 30% of its value in a few days, TON is showing signs of life with a modest rebound.
But is this recovery a sign of an imminent bullish turnaround, or just a pause in a persistent downtrend? Let’s analyze the current dynamics, holder behaviors, and technical indicators to gain clarity.
Just a week ago, Toncoin seemed poised for a comeback. By the end of March, the token had broken the local resistance of $3.95, forming higher lows, a classic sign of a bullish trend. Holders hoped for a continuation towards the $4.8 mark, but these hopes were dashed by a wave of massive selling. On-chain data reveals increased activity from whales, these large holders capable of swaying the market.
In just eight days, TON plummeted by 26.6%, dropping below key support levels like $3.5. It is now forming a triangle pattern. This rapid correction caught investors off guard, especially as daily transaction volumes surged, signaling a distribution movement. Whales seem to have taken advantage of the brief rise to liquidate their positions, leaving small holders facing significant losses.
On-chain indicators paint a mixed picture. The Spent Output Profit Ratio (SOPR), which measures whether tokens are sold at a profit or loss, indicates that the majority of recent transactions are done at a loss. This signal suggests that some holders, trapped by the fall, are succumbing to panic and selling to limit their losses.
However, it’s not all gloomy. In February and March, data showed an accumulation phase, with long-term holders strengthening their positions as the price declined. This behavior has shifted recently: the Net Position Change of holders is decreasing, indicating that selling pressure dominates.
This distribution phase, combined with whale pressure, keeps TON in a fragile position.
Yet, one detail is intriguing: despite the decline, the number of active addresses on the network remains relatively stable. This could indicate that the TON ecosystem retains a solid base of loyal users, potentially ready to absorb selling pressure if conditions improve.
Technically, TON’s situation remains precarious. After breaking its bullish structure at the end of March, the token plunged by 32% in five days, invalidating the $3.5 support. The Chaikin Money Flow (CMF), an indicator of capital flows, shows a negative value of (-0.14), confirming strong selling pressure.
Currently at $2.9, TON is heading towards a retest of its previous low at $2.4. If the latter breaks, then TON will likely move down towards at least $1.84.
Another aspect to watch is the volatility. After weeks of compression, the Bollinger Bands on the 12-hour chart indicate a possible imminent expansion. The direction of this expansion, whether bullish or bearish, will largely depend on the overall crypto market sentiment and Bitcoin movements.
Toncoin does not exist in isolation. The recent weakness in the crypto market, with Bitcoin flirting with critical support levels, weighs on altcoins like TON. A recovery in the crypto king could provide a tailwind, enabling TON to regain ground.
On the fundamental side, The Open Network continues to attract interest. Backed by an active community and heavyweight investments, particularly from Silicon Valley VCs, TON enjoys increasing adoption. Integration with Telegram, with its hundreds of millions of users, remains a major advantage. If the network can capitalize on this momentum, it could attract new capital, even in a bearish context.
So, can Toncoin explode after this slight rebound? In the short term, signals remain mixed. Whale selling pressure and holder capitulation are hindering the bullish momentum.
For investors, caution is advised. A return above $3.5 would be an initial encouraging sign, but a true explosion would require a breakthrough past $4, backed by significant buying volume.
In the long run, TON’s strong fundamentals and growing adoption could set the stage for a sustainable rally, provided that whales stop exerting downward pressure on the market.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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