Why the Toncoin Price Surge May Be Short-Lived
Toncoin’s Recent Price Surge
- Toncoin (TON) price has surged by 45% from its lowest point this month.
- It hit a high of $3.6240, its highest level since February 24.
- Market capitalization soared to $8.4 billion.
Why Did Toncoin Surge?
- The increase is partly due to a broader crypto market recovery.
- A major factor was Pavel Durov’s release from France after months of legal trouble.
- Durov, the Telegram founder, had been arrested in 2024 over allegations including money laundering and illegal transactions.
- Many in the crypto community supported Durov, boosting confidence in Toncoin.
Why the Rally May Not Last
Despite the recent gains, several factors suggest that Toncoin’s surge could be temporary:
1. Weak On-Chain Metrics
- Toncoin’s inflation rate has risen to 0.40% (up from 0.33% in October).
- Total supply has increased to 5.124 billion, leading to potential oversupply concerns.
- Daily transactions have dropped to 2.15 million, down from 20 million in September 2023.
- Active wallets on the TON Blockchain are declining.
- Total Value Locked (TVL) in DeFi has fallen to $180 million from $800 million.
2. Weak Performance of TON-Based Tokens
- Popular TON-based tokens like Hamster Kombat, Catizen, and Tapswap have crashed, wiping out billions in value.
- STON.fi, the biggest decentralized exchange (DEX) on TON, has a small market share, processing only $7.1 million in the last 24 hours.
3. “Buy the Rumor, Sell the News” Effect
- Investors tend to overreact to major news, causing temporary price spikes.
- After the initial rally, traders often sell their holdings, leading to price drops.
- Example: Cardano surged after being included in Trump’s crypto holdings, but tumbled shortly after.
Technical Analysis: Resistance & Possible Drop
- Toncoin hit resistance at the 50-day moving average, a key technical level.
- It also faced resistance at a key Murrey Math Lines stop-and-reverse point.
- This suggests that TON could resume its downtrend and drop below $3 as the hype around Durov’s release fades.
Final Thoughts
While Toncoin’s recent rally has been impressive, weak fundamentals, declining on-chain activity, and historical market behavior suggest that the surge may not last. Investors should be cautious and watch key technical levels for signs of a potential pullback.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult with a financial advisor before making investment decisions.
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