Despite recent underperformance, TON coin continues to stand out among altcoins as it approaches its all-time high, displaying remarkable resilience.
Unlike numerous altcoins that have experienced significant drops, TON, along with BTC, TRX, and SOL, shows a more robust market position.
Is there a historical signal indicating a good time to buy TON?
Over the last 180 days, the Sharpe Ratio has dropped to historically low levels, signaling reduced risk-adjusted returns.
This pattern has previously corresponded with the times when TON hit price floors and went through accumulation phases.
In past instances, similar declines in the Sharpe Ratio have signaled market recoveries, implying that TON could be on the verge of entering another accumulation period.
If history repeats itself, this moment might present an ideal opportunity for long-term traders looking for favorable risk-reward scenarios.
The Normalized Risk Metric (NRM) also follows this trend, reaching low-risk levels reminiscent of previous accumulation phases.
From the Price Drawdown Heatmap, it is evident that while many altcoins are struggling, TON still maintains a strong structural position.
These various indicators together reinforce the idea that TON is approaching a promising accumulation phase, as traders move away from weaker assets towards high-performing and resilient cryptocurrencies.
Signals of a potential breakout in TON
On TON’s 1-hour Binance chart, an inverse head and shoulders pattern can be observed, historically signaling a bullish reversal.
This pattern suggests a potential breakout above the neckline, which could initiate a sustained upward trend.
As of the time of writing, the Relative Strength Index (RSI) stands at 63.59. This indicates an increase in buying activity, with the RSI still below overbought conditions, showing room for further growth.
If TON manages to surpass key resistance levels, it may confirm a bullish reversal, aligning with the historical price recoveries seen during similar low points in the Sharpe Ratio and NRM.
The convergence of these signs strengthens the case for an upcoming shift in TON’s favor.
Increasing long positions could trigger a short squeeze
An analysis of the Long/Short Ratio on Binance reveals a gradual increase in long positions, reflecting mounting optimism among traders.
The fluctuations in short positions indicate lingering doubt, yet the recent trend towards a higher long ratio suggests traders might be anticipating a breakout.
Historically, changes in Long/Short positioning before a notable uptrend have often foreshadowed strong price increases, especially when accompanied by bullish signals like a low Sharpe Ratio and inverse head and shoulders patterns.
If long positions continue rising while shorts remain trapped, a cascade of liquidations could propel further price upsurges, reinforcing the bullish sentiment for TON.
Usually, when the Sharpe Ratio and NRM dip to low levels, they point towards potential bottoms or accumulation areas.
Therefore, the combination of TON’s low Sharpe Ratio, decreasing NRM, and robust price resilience indicates an attractive long-term accumulation chance.
The presence of the inverse head and shoulders pattern supports the notion of potential growth, as the Long/Short positioning indicates a rising bullish sentiment.