Recently, Tonicoin [TON] has experienced a significant reduction in its price volatility. According to a post on X (formerly Twitter) by cryptocurrency analyst Ali Martinez, the Bollinger Bands have tightened around the TON price on the 12-hour chart.
This tightening indicates not only a decrease in volatility surrounding TON in recent days but also suggests that a major price shift may be imminent.
Following periods of low volatility, a rapid price movement typically ensues. The question now is, in which direction will Tonicoin move next?
Market Performance and Indicators Raise Caution for Buyers
In August, the Tonicoin network witnessed a significant spike in daily active addresses when the price dropped following its surge past $7.5.
Since then, this metric has remained relatively subdued, with even the November upsurge failing to attract a substantial number of participants.
Network growth, which gauges the number of new addresses being created on the network, has also remained steady since October.
Within the last two weeks, both the metrics of active addresses and network growth have experienced a slight decline.
The distribution of supply chart reveals a rise in addresses holding small amounts (100 TON or less) since October. Addresses with 1–100 TON have shown no growth since January 24th.
Conversely, larger addresses have been steadily decreasing, indicating active selling. While the 10k-100k group increased over the past three weeks, it witnessed a decline last week.
The On-Balance Volume (OBV) of Tonicoin has dropped below the lows of November and is currently hovering near the lows of September.
The price has breached the lower boundaries of recent months and revisited the $3.42 support level, which represents the 78.6% Fibonacci retracement level.
Although it was anticipated that this crucial retracement level would be defended, the lack of network activity coupled with increased selling volume in recent weeks suggests a potential downward price movement. The overall market structure shows a strong bearish trend on the daily chart.
A resurgence in Bitcoin [BTC] could invigorate the altcoin market and encourage Tonicoin bulls. Until the $4.5 level is re-established as a support level, swing traders may want to maintain a bearish stance.