Toncoin’s [TON] holdings of the USDT stablecoin have surpassed $1 billion after a remarkable +670% increase over a six-month period.
This development has positioned the Telegram-associated network as the 10th largest network in terms of stablecoin dominance, just below Ethereum [ETH]-based Optimism [OP].
Factors Driving Toncoin’s Expansion
Examining the growth, CryptoQuant expert Burak Kesmeci has connected the surge to the overall expansion of stablecoins and Toncoin’s competitive transaction fees. He expressed,
“I foresee the USDT supply growing to $200 billion (from the current $120B) during the bullish market trend. This rise is likely to ramp up the demand for efficient and cost-effective blockchain networks like TON, thereby fueling a continuous increase in the volume of USDT on the TON network.”
Additionally, the average transfer fee for USDT on the TON network decreased from $0.061 to $0.035 – marking a 42% fee reduction within the same timeframe.
TON witnessed an almost 80% surge in its price index between May and June, somewhat mirroring the escalation in stablecoin activity during that period.
However, its valuation slumped further in August, partly attributable to the detention of Telegram’s Founder. Analogous to many alternative coins, TON traded beneath its crucial long-term trendline resistance.
That said, TON’s stagnant OBV (on-balance volume) indicated feeble spot market interest and the obstacles faced by the altcoin below the trendline in recent months.
Only a definitive breakthrough above $5 could solidify a shift in the market structure, likely bolstering an upward trend.
Meantime, a substantial bullish stance was observed on the Binance platform at the time of writing.
Approximately 53% of top traders on Binance held net long positions on the altcoin, hinting at a moderate anticipation of price recovery from recent lows.
The selling pressure on the altcoin seemed moderate as well. In September, the exchange-based selling pressure witnessed a significant drop, as evidenced by the decrease in liquidity on exchanges. However, this metric steadily rose in October – indicating increased selling trends.
Furthermore, the volume of reserves held by major holders surged during the same period, suggesting these large investors might be acquiring discounted TON from retail sellers unloading their assets. Consequently, the exchange-related selling pressure could potentially balance out.
Nonetheless, a robust resurgence in TON’s performance might be obstructed by tepid interest levels, illustrated by the minimal daily active wallet addresses.
In conclusion, propelling TON’s price trajectory beyond the current scenario would necessitate more than just notable growth in stablecoins.