The cryptocurrency market has experienced a decline in trading activity over the past month, leading to a 4% drop in the global market capitalization. While several crypto assets have seen their values plummet by double digits, Toncoin’s (TON) price has risen, trading at $7.93 as of this writing, a 24% increase in the last month.
Toncoin’s Price Rally May Not Be Sustainable
An on-chain assessment of TON’s price movements suggests that buyers’ exhaustion may have set in. The token’s Price-Daily Active Address (DAA) Divergence, a metric that compares an asset’s price movements with the changes in its number of daily active addresses, shows a 281.15% difference between the altcoin’s price and the change in its daily active addresses. This signals that TON’s price rally has been driven by speculative buying or potential overvaluation.
Confirming that TON is overvalued, its Market Value to Realized Value (MVRV) ratio is 59.18%. When an asset’s MVRV ratio is above one, it is deemed overvalued, and most traders sell for profit at this level.
Toncoin Price Prediction: Divergence Hints at Potential Correction
Despite TON’s price rally in the last month, its Chaikin Money Flow (CMF) has trended downward since June 15. This indicator measures money flow into and out of the market, and a bearish divergence is created when an asset’s price rises while its CMF falls. This suggests that the price uptrend might be losing momentum and may be unsustainable.
If TON’s price corrects, it may fall to $7.70. However, if demand increases and the token maintains its uptrend, TON’s value may rise to $8.28.
“Traders interpret this as a warning signal of a potential price reversal.”
| Metric | Value |
|---|---|
| Price-DAA Divergence | 281.15% |
| MVRV Ratio | 59.18% |
Conclusion
The cryptocurrency market’s recent decline has not affected Toncoin’s price, which has risen significantly in the last month. However, an on-chain analysis suggests that the price rally may not be sustainable, and a potential correction could be on the horizon. Traders should closely monitor TON’s price movements and network activity to make informed decisions.
