The cryptocurrency Toncoin (TON) has recently experienced a significant drop in volatility. A post by crypto analyst Ali Martinez on X (formerly Twitter) highlighted the tightening Bollinger Bands around the TON price on the 12-hour chart.
This decrease in volatility not only indicates stability in Toncoin’s recent performance but also suggests a potential significant price movement on the horizon.
Following periods of low volatility, rapid price fluctuations often occur. The question now is: in which direction will Toncoin move next?
Caution Advised for Buyers Based on Price Action and Metrics
Active addresses on the Toncoin network peaked in August as the price dropped after surpassing $7.5. Since then, the number of active addresses has remained relatively stagnant. Even during the November rally, there was no significant increase in participants.
Network growth, which tracks the creation of new addresses on the network, has also remained steady since October. In the past two weeks, both active addresses and network growth have slightly decreased.
The breakdown of supply distribution reveals a rise in addresses holding small amounts of TON (100 or fewer) since October. Addresses with holdings of 1–100 TON have shown no growth since January 24th.
Conversely, larger addresses have been consistently decreasing, indicating active selling. While the 10k-100k group expanded over the past three weeks, it experienced a decline last week.
Toncoin’s On-Balance Volume (OBV) has dropped below the November lows and is hovering near the September lows. The price has breached the range lows of recent months and retested the $3.42 support level, corresponding to the 78.6% Fibonacci retracement level.
Despite expectations for this crucial retracement level to hold, weak network activity and increased selling volume in recent weeks suggest a potential downward price movement. The overall market structure on the daily chart indicates a strong bearish sentiment.
A resurgence in Bitcoin (BTC) could energize the altcoin market and boost Toncoin’s performance. However, until its price reclaims $4.5 as a support level, swing traders are advised to maintain a cautious outlook.