Looking at the weekly charts, Toncoin [TON] has shown a moderate recovery in its price movement. It experienced a surge from a low of $4.7 to a peak of $6.09. However, in the last 72 hours, the altcoin retraced slightly. Currently, Toncoin is valued at $5.66, marking a decrease of 0.98% within the past day.
Over the monthly charts, Toncoin has depreciated by 10.81%.
The recent fluctuations in the market have sparked discussions among analysts. Among them, Cryptoquant analyst Joao Wedson highlighted a spike in TON’s risk exposure ratio, indicating a potential bullish trend.
Rise in Toncoin’s Risk Exposure Ratio
Wedson’s analysis suggests that the risk exposure ratio of TON currently reflects a moderately high level of risk within the Toncoin ecosystem.
He attributes this increase to a substantial allocation of TON’s TVL into sectors like lending, derivatives, and options, which are particularly sensitive to market liquidity risks.
Since the last significant price surge of Toncoin, the risk exposure ratio has been steadily climbing. This upward trend indicates a growing influx of capital into leveraged financial products including loans and derivatives.
While this surge may raise concerns about stability, it also signals confidence in the market. An increasing demand for derivatives and leveraged products reflects a positive market sentiment and confidence in the investors’ outlook.
Nevertheless, networks with high leverage could amplify losses in bearish conditions. Despite this, speculative traders might view the rising demand as an opportunity to leverage on derivative markets.
Implications for TON’s Price Movement
While the elevation in the risk exposure ratio might suggest caution due to heightened volatility, it also indicates optimism and confidence within the market.
One observable aspect of this positivity and confidence is the consistent decrease in supply on exchanges.
Within the last week, the supply has declined from 1.9 million to 1.82 million, demonstrating increased accumulation as investors move TON tokens into private wallets for enhanced security.
Furthermore, large holders, or whales, have displayed a bullish stance over the past 3 days, with a positive netflow of 122.33 million TON tokens. This shows that whales are actively purchasing and accumulating tokens rather than offloading them.
An increase in capital influx from whales serves as a strong indicator of market confidence.
Lastly, the positive DAA divergence in Toncoin’s price has been consistent over the previous week. A positive DAA divergence signifies that the recent price increments are supported by a growing number of active addresses, signifying a robust market with strong fundamentals.
To conclude, the recent rise in the risk exposure ratio has attracted more speculative traders to join the market. If this trend continues with sustained capital inflows, Toncoin is likely to witness further growth, possibly reclaiming its previous levels of $6.2. However, if risk-averse investors decide to exit the market due to heightened volatility, TON could experience a drop to $5.4.