Why is Toncoin's Price Falling?
Toncoin's price has faced a sharp decline, mirroring the struggles of other altcoins losing momentum in recent weeks. This trend worsened after the Federal Reserve's hawkish decision, which impacted markets. Negative factors, such as rising inflation, declining token burn rates, and weak performance of ecosystem tokens, suggest that Toncoin's price may continue to fall.
Declining Burn Rate Threatens TON's Price
According to TonStat, the daily burn rate of Toncoin has dropped to less than 6,000 coins, representing an 85% decline from September's peak of nearly 40,000 coins. Token burns, which permanently remove coins from circulation, play a critical role in supporting their value. This decline could weaken price stability due to reduced demand.
Moreover, Toncoin's annual inflation rate has climbed to 0.31%, the highest level since August. The daily issuance of new Toncoins reached 84,000, increasing the circulating supply, which could further pressure the price.
TON Ecosystem Challenges and Decreasing User Interest
The Toncoin ecosystem faces additional hurdles. The total value locked (TVL) in TON-associated DeFi protocols has dropped from a peak of $760 million to the current $275 million.
Simultaneously, tokens linked to TON are losing value. For instance, Hamster Kombat has dropped by 22% over the past 30 days, with only 2.7% of holders in profit. Other tokens, like PunkCity and Catizen, have declined by 34% and 31%, respectively. These declines indicate diminishing user interest and investment within the ecosystem.
Technical Outlook: Potential Decline to $4.44
Toncoin's price recently peaked at $7.10, forming a double-top pattern. According to technical analysis, a key support level lies at $4.44, the lowest price recorded on September 6.
Additionally, the price has fallen below the 50-day and 100-day moving averages and the Ichimoku cloud indicator, signaling a bearish trend. If the price breaches the $4.44 level, it could further drop to $3.90, aligning with the 61.8% Fibonacci retracement.
Potential Rebound: Key Resistance at $6
Conversely, if Toncoin surpasses the key resistance level at $6, last reached on September 27, the bearish trend could be disrupted. This would potentially restore investor confidence and lead to a price recovery.
Toncoin's price trajectory will depend on improving fundamentals, such as increasing token burns, reducing inflation, and reigniting interest in its ecosystem.
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