The digital asset Toncoin [TON] has demonstrated weaker performance compared to Bitcoin [BTC] and other alternative cryptocurrencies over the past month, registering a 5% decline in value. Presently, TON is trading at $5.28, with slight price fluctuations impeding any substantial movements.
Analyzing the Sharpe ratio reveals that current holders are facing notably reduced rewards. At present, this metric reflects a negative value, marking its lowest point in the last month.
A negative Sharpe ratio indicates a higher risk associated with holding Toncoin relative to the potential rewards. Given TON’s failure to achieve notable growth, a persistently low and negative Sharpe ratio could diminish enthusiasm for the token, leading to further declines.
TON’s Price Stagnation Amidst Minimal Volatility
Observing TON’s daily chart over the past fortnight, the price has fluctuated between $5 and $5.40. During this period, the Relative Strength Index (RSI) has consistently remained below 50, signifying a lack of buyer interest necessary for a price breakthrough.
Presently, TON’s RSI stands at 47, indicating a surplus of sellers over buyers. The lack of buying pressure contrasts with the broader market sentiment, where the crypto fear and greed index point towards heightened retail interest in digital assets.
TON’s failure to secure a substantial breakout, either upwards or downwards, is further underscored by the minimal volatility evident in the contracting Bollinger bands.
Although the token reached the upper band at $5.39, it encountered resistance at that level. A potential price surge above this point could signal the commencement of an upward trend.
However, should Toncoin remain unable to break free from its current consolidation phase, it faces the risk of a significant 18% drop from its current value towards the 1.618 Fibonacci level at $4.28.
The surge in TON wallets experiencing losses could potentially trigger such a decline. Data from IntoTheBlock notes a 29% rise in these wallets over a three-week period, reaching 63%.
If such traders opt to curtail their losses, it may intensify selling pressure, resulting in further price dips.
Positive Signals Emerge in TON Blockchain Activity
The activity on the TON blockchain witnessed a surge towards the end of September. However, subsequent data reflects a decline in active users and transaction volume on the network.
Information from TokenTerminal suggests a mild recovery. On the 20th of October, the daily active users on TON rose from 567,000 to 792,000, while the daily transaction count increased from 5 million to 5.7 million.
Historically, an uptick in network usage has served as a stimulant for growth. Therefore, should this recovery persist, it could reignite a bullish outlook towards Toncoin.