Markets
Toncoin (TON) price may drop as demand plummets
Trading activity in the cryptocurrency market has declined over the past month. As a result, the global cryptocurrency market capitalization has fallen by 4% over the past 30 days.
While several crypto assets have seen their values plunge into double digits, the price of Toncoin (TON) has surged. Trading at $7.93 at the time of writing, the altcoin’s value has increased 24% in the last month.
Toncoin Price Rally May Not Be Sustainable
An on-chain assessment of TON price movements shows that buyer exhaustion may have set in. This is based on the token’s DAA (Price-Daily Active Address) divergence readings.
This metric compares an asset’s price movements to changes in its daily active address count. It tracks whether an asset’s price movement is supported by the corresponding activity on its network.
At the time of writing, TON’s price-DAA divergence is 281.15%. This signals that its price has skyrocketed significantly relative to its daily active addresses. It suggests a 281.15% difference between the altcoin’s price and its daily active addresses change.
Toncoin Price DAA Divergence. Source: Holiness
When this metric increases like this, it signals that the price rally has occurred without a corresponding increase in network activity. This could mean 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%. The MVRV ratio of an asset measures the ratio of its current price to the average price at which all its coins or tokens were acquired.
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When its value is greater than one, the current market value of the asset is significantly higher than the price at which most investors acquire their securities. It is considered overvalued and Most traders sell to make a profit at this level.
TON Price Forecast: Divergence Suggests Potential Correction
Despite the price rally of TON over the past month, its Chaikin Money Flow (CMF) has been trending downward since June 15.
This indicator measures the flow of money in and out of the market. A bearish divergence is created when the price of an asset rises while its CMF falls. This suggests that the uptrend in prices may be losing momentum and may be unsustainable. Traders interpret this as a warning sign of a potential price reversal.
If the price of TON corrects, it could drop to $7.70.
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However, if demand increases and the token maintains its bullish trend, TON value could rise to $8.28.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto strives to provide accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult a professional before making any financial decisions. Please note that our Terms and conditions, Privacy PolicyAND Disclaimers They have been updated.