Crypto expert Gerhard, with over 84,000 subscribers, provided a YouTube analysis of Toncoin (TON), which recently entered the top 10 or 11 cryptocurrencies based on its $13 billion market capitalization and is currently trading at $4.78.
The analyst explored Toncoin’s market dynamics, ongoing volatility, and the factors influencing its future performance. The analyst’s insights reveal cautionary and optimistic views on Toncoin’s potential, especially in light of recent market developments.
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Toncoin’s Market Standing and DeFi Activity
Toncoin’s market capitalization currently stands at $13 billion, placing it among the leading cryptocurrencies. However, its position fluctuates between 10th and 11th, depending on the different platforms you check.
Gerhard added that in the decentralized finance (DeFi) sector, Toncoin ranks 21st, with $351 million in total value locked (TVL). While this figure reflects some activity, it has been unstable, signaling underlying concerns about the coin’s long-term sustainability.
Toincoin’s Sharp Decline in Value
The analyst noted that Toncoin experienced a sharp 50% decline in its on-chain value within one month. This sudden drop was largely attributed to external events surrounding Telegram, including the arrest of one of its founders.
This event triggered a 21% fall in Toncoin’s price relative to Ethereum, highlighting its susceptibility to external shocks. Despite this, the coin has recovered with a 300% rise from its lowest point in certain metrics. However, the durability of this recovery is still in doubt.
Concerns Over On-Chain Metrics
One key metric discussed was the value bridged from Ethereum to the Ton blockchain, which peaked at $19 million in April 2024. Since then, both inflows and outflows have significantly slowed, raising concerns about Toncoin’s ongoing DeFi activity.
The analyst emphasized that this downward trend in net flows could reduce Toncoin’s usability and popularity, as decreased Ethereum-Ton transactions could impact liquidity and user engagement.
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Show more +Show less – Decreasing Trading Volume on Ethereum and Binance
Gerhard also highlighted the diminishing trading volume of Toncoin on the Ethereum and Binance Smart Chain platforms. While there was high trading activity early in 2024, particularly in February, March, and May, the volume has since declined.
Much of the recent activity on the Ton blockchain is tied to Notcoin, a meme coin that has performed poorly, further dampening sentiment toward Toncoin.
Broader Crypto Market Trends and Investment Strategy
The speaker also pointed out broader trends in the crypto market, particularly focusing on the stablecoin market cap as an indicator of liquidity.
Since April 2024, the market has seen limited inflows, making analysts cautious about the future performance of cryptocurrencies like Toncoin. Moreover, Toncoin’s dominance within the crypto market has seen substantial drops, further adding to concerns about its momentum.
Shorting Altcoins and the Risk of Inflation
The analyst cautioned investors against Toncoin’s token inflation, with a large number of new tokens entering the market daily, contributing to price declines.
Given the volatility and the inflationary nature of Toncoin, the speaker suggested shorting certain altcoins, including Toncoin, to capitalize on their falling prices. The speaker shared their strategy, which involves shorting assets vulnerable to inflation and market downturns.
Finally, Toncoin has experienced symbolic market gains, but its recent performance, influenced by external drama and internal metrics, paints a picture of caution. The analyst’s insights suggest that while recovery is possible, the coin’s volatility and high inflation rates make it a risky investment in the near term.
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