This week, many altcoins from the top 20 showed double-digit growth, but some, including TON, were exceptions. This is due to several key metrics of Toncoin.
We examine how on-chain indicators affect the current weak performance of TON and what this may mean for the future dynamics of Toncoin.
What is TON - an overview of the Toncoin project and cryptocurrency
Whales still do not believe in TON
One of the main drivers of the drop in Toncoin's price below $5 is the net capital flows of whales. This metric reflects the activity of addresses that own from 0.1% to 1% of the total circulating volume of tokens. A positive value of the metric indicates that large investors have accumulated more tokens than they sold. A negative value, on the contrary, indicates that sales exceeded purchases.
According to IntoTheBlock, the net flow in the whale segment decreased by 117% over the last seven days. This means that whales were selling tokens, putting pressure on the price.
If this trend continues, the price of TON may deepen the decline. Additionally, other indicators of Toncoin indicate a decrease in confidence among short-term holders.
For example, the metric 'Address by ownership time' shows that many investors who bought TON in the last 30 days preferred to sell their tokens rather than hold them. Such sales also exert pressure on the token's value.
If Toncoin cannot attract new short-term users, the prospects for recovery to $7 may not materialize.
The rally to $7 is still postponed
On the daily chart, the asset continues to trade within the descending triangle. This contrasts with other altcoins that have recently made bullish breakthroughs.
A descending triangle is a bearish technical pattern formed by descending upper and horizontal lower trend lines. It indicates increasing selling pressure. If the price cannot break through the upper boundary of the pattern, it may continue to fall.
As seen below, Toncoin attempted to make such a breakthrough. However, the bounce from $4.95 showed that the efforts were in vain and returned the token to the mark of $4.84. If the bears continue to neutralize the bulls' attempts, the price risks falling to $4.45.
However, if the metrics described above return to the bullish zone, the trend may change. In that case, TON will have a chance to rise to $7.27.
