Telegram-based project Toncoin (TON) has been losing market dominance despite outperforming Bitcoin (BTC) for most of the year. Before the recent rebound, TON had been struggling for two weeks, with its price dropping 15%.
Trading at $6.79 at the time of writing, this analysis proves that the token may not be out of the woods yet. Here’s why:
Whales dump Toncoin, raising market concerns
The main reason for the potential decline of Toncoin is the behavior of whales. Whales are entities or individuals who hold large amounts of the circulating supply of a cryptocurrency. Their actions and inactions affect the price.
According to IntoTheBlock, the net flow of large TON holders has decreased by a whopping 97.05% over the past seven days.
This is in contrast to the massive inflows of a few weeks ago. Net flow is the difference between the inflows and outflows. A positive ratio means that whales have accumulated more than they have sold.
However, the negative ratio means that this is not the case, and this is also the case for TON. Also, if you look closely, you will see that whales sold 1.4 million TON tokens between July 21 and 28. If this continues, the TON price could partially offset the recent slight increase.
Read more: What is Telegram Bot Coin?
As a result of the TON price rebound, the P&L ratio for daily on-chain transactions has reached its highest level since July 19. This indicator shows whether token holders are realizing losses or profits. If it is negative, realized losses are greater than profits.
For Toncoin, the price increase has led to increased profit taking. However, profit taking usually leads to a decline, especially when selling pressure increases. Therefore, if the ratio of profit to loss in on-chain transactions increases, the upward trend of TON may be interrupted.
TON Price Prediction: The Bounce Is Not Strong Enough
According to the daily chart, the price increase of Toncoin is not supported by any significant indicators. For example, the Awesome Oscillator (AO) is negative. AO measures market momentum and determines the initial changes in the cryptocurrency price.
When AO is positive, momentum is rising. However, when the indicator reading is negative, like TON, momentum is declining. Another oscillator with a similar bearish bias is the Moving Average Convergence Divergence (MACD).
At the time of writing, the MACD has fallen into the red zone, reinforcing the possibility of a downtrend. If this continues, the price of TON may fall to $6.57. However, if selling pressure increases, the value may fall to $6.02.
Read more: 6 Best Toncoin (TON) Wallets in 2024
However, if whales start accumulating more TON, as opposed to what is currently happening, the value could rebound. If this is true, the price of Toncoin could jump to $6.90 and eventually reach $7.18.
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