Toncoin [TON] witnessed a slight recovery last week after facing losses. The 4-hour chart displayed a bullish market structure, but according to research by CryptoCrypto, short-term recovery seems dim.
The trading activity during the past week is depicted in the shaded box. Although prices saw a temporary increase over the weekend, sustainability is uncertain. Toncoin has been on a downtrend since July, with on-chain metrics indicating the challenges in initiating a recovery.
Whales’ Accumulation and Distribution
Addresses holding 100K-1M TON witnessed a rise of 26.84% and 8.1% respectively, indicating accumulation by some large and small-scale investors over the last month. Conversely, larger whale wallets saw some level of distribution, with a decline of 2.75% and 1.07% in their balances – suggesting sustained selling pressure on TON.
An analysis of historical break-even prices revealed that numerous addresses were profitable during the bullish period in April and May. However, with the recent price reversal, those who bought TON above $6 are likely eager to break even. Notably, 75.81% of recent TON buyers are currently at a loss, signifying potential resistance levels ahead in case of price surges.
Evidence pointing towards a challenging short-term TON recovery
The Open Interest surged by $13 million post a bounce in prices from $4.4 to $4.92 on the 6th of September.
Despite this rise, the funding rate indicated a bearish sentiment, with a growing number of individuals shorting Toncoin. Additionally, the spot CVD showed a declining trend, reflecting reduced buying pressure in spot markets. These factors collectively suggest that Toncoin might encounter difficulties in the upcoming weeks.