Toncoin (TON) finds itself in a complex market situation as both on-chain metrics and technical analysis point to a bearish outlook for the cryptocurrency. Despite signs of accumulation among holders, recent price action raises concerns about Toncoin’s near-term performance, suggesting that it may be overvalued.
Indications of Overvaluation
Currently ranked 10th by market capitalization, Toncoin has experienced a significant decline in value. After peaking at $6.13 in late September, the token has fallen by nearly 14%, leading analysts to question its valuation. Charts reveal a bearish market structure on the daily timeframe, causing alarm among traders and investors.
The correlation matrix from Into The Block shows that Toncoin has a +0.26 correlation with Bitcoin (BTC), which has rallied by 10.5% over the past month. This underperformance highlights Toncoin’s struggles in keeping up with broader market trends.
Accumulation Amidst Price Decline
Interestingly, recent data suggests that Toncoin holders are actively accumulating the token. In the last 24 hours, there has been a net outflow of 5.11 million TON from exchanges, indicating that holders are choosing to keep their tokens rather than sell them. This trend contrasts with the previous month, during which there was a net inflow of -1.73 million TON.
However, while accumulation is taking place, it is important to note that overall sentiment remains cautious. Earlier in the week, some selling pressure was observed, suggesting that not all holders are confident in a bullish turnaround.
Indicators of Price Pressure
Further complicating the outlook for Toncoin is the rise in its Network Value to Transaction (NVT) ratio, which has increased since September. A higher NVT ratio suggests that the market cap of the asset is higher compared to the volume of tokens being transacted, indicating possible overvaluation.
Additionally, the realized cap HODL waves, particularly for coins held between 90 and 180 days, have started to decline. This trend implies that long-term holders are either moving or selling their tokens, which could hinder any potential rally in the near future.
Analyzing Price Action
Taking a look at the technical indicators, Toncoin’s daily price chart paints a bearish picture. The most recent significant high was set at $6.13, and the cryptocurrency will need to surpass this level in order to establish a new upward trend. The On-Balance Volume (OBV) and Relative Strength Index (RSI) both indicate a lack of strong demand and neutral momentum, further complicating the situation for potential bullish scenarios.
Furthermore, Toncoin faces a resistance zone around $5.40 from a bearish order block. For any upward movement to occur, bulls will need to come together and challenge this resistance. Otherwise, they risk being left behind as Bitcoin continues to gain momentum.
The Future of Toncoin
At present, the current indicators present a mixed outlook for Toncoin. While the accumulation trend offers some hope, the signals of overvaluation and the bearish market structure cannot be ignored. Traders and investors should remain vigilant, as market dynamics can change rapidly.
In summary, Toncoin’s future largely depends on its ability to overcome current resistance levels and attract stronger demand. If accumulation continues and bullish sentiment prevails, there may be a chance for a turnaround. However, the prevailing bearish indicators suggest caution for those considering investing in Toncoin in the immediate future.
