A curious dynamic has been drawing attention in the TON ecosystem: when TON’s price rises, the amount locked in staking (Staking TVL Ratio) tends to decrease. This correlation suggests that investors, noticing the price increase, quickly withdraw their coins from staking, possibly to seize trading opportunities in the market.
In March 2024, we witnessed a clear example of this behavior. The Staking TVL Ratio began to drop significantly as TON’s price surged to new highs. Interestingly, as interest in staking diminished, funds started migrating to centralized exchanges (CEX) and decentralized exchanges (DEX) like Ston.FI and Dedust, boosting the TVL in those categories.
More recently, the Staking TVL Ratio has once again reached low levels, coinciding with what appears to be a local bottom in TON’s price. This seemingly counterintuitive dynamic — where lower interest in staking supports a price increase — can be explained by the rise in liquidity available for trading.
📈Why Does This Happen?
🔸Demand for Liquidity: When investors withdraw funds from staking, they often transfer them to exchanges for quick trades. This movement increases demand for the token, driving prices higher.
🔸Greater Flexibility: Locking coins in staking reduces flexibility, something investors tend to avoid during periods of high volatility or opportunities for quick gains.
🧠Staking TVL Ratio as a Sentiment Metric
This relationship makes the Staking TVL Ratio a valuable indicator for assessing market behavior. When the ratio declines, it signals that investors are less willing to lock their assets, opting instead to keep them available for trading. This can indicate:
🔸Potential price increases for TON due to rising demand.
🔸A shift in investor strategy, focusing on liquidity and quick trades.
Written by joaowedson
