- Retail investors have substantially reduced exposure to TON, but the rising staking TVL ratio suggests strong long term holder confidence.
- Toncoin must break above the $5 resistance level to confirm a bullish trend, with key resistance at $5.94 and strong support at $4.45.
- The recent arrest of Telegram’s CEO has negatively impacted TON, and a drop below $4.63 could push prices lower to $3.77 or $2.72.
Toncoin (TON) has had a sharp decline in investor confidence, with strong deleveraging across decentralized exchanges (DEXs), centralized exchanges (CEXs), derivatives, and options markets, according to CryptoQuant.
Many retail investors have exited their positions, reducing their exposure. However, the Staking TVL Ratio is rising, indicating that some investors are still holding TON with long-term conviction.
Analyst Dark Knight noted that a break above the $5 level could lead to a bullish move, while analyst Ali warned that recent events might push TON into further decline.
Retail Capitulation and Current Market Metrics
Retail investors have substantially reduced their exposure to TON, as total value locked (TVL) in trading platforms has dropped. This decrease suggests widespread discouragement among investors.
Historically, such capitulation often creates opportunities for large players to accumulate assets at lower prices. Despite this, the Staking TVL Ratio has started to increase, showing that some investors prefer staking over selling, suggesting confidence in the asset’s long term potential.
At press time, Toncoin was trading at $4.89, up 0.98% in the past 24 hours but down 13.55% over the past month. The market cap is at $12.16 billion, a 1.03% increase.
Price Levels and Technical Indicators
According to Dark Knight, TON is up for an upward move but awaits confirmation of a breakout above $5. A strong breakout with high volume could suggest the end of its downtrend.
Source: Dark Knight
However, price movements remain within a descending pattern, showing continued bearish pressure. Key resistance is at $5.18, where a breakout could indicate a shift in market momentum.
Another resistance is at $5.94, aligning with the 50 day and 200 SMA. A decisive move above this level could strengthen bullish sentiment. Strong support is at $4.45, a crucial Fib retracement level.
A break below this could lead to further declines, with $4.20 as the next important level. The RSI is at 39.68, indicating weak momentum. A drop below 30 could suggest oversold conditions, while a move above 50 would signal a potential recovery.
The MACD is in negative territory, confirming ongoing bearish sentiment. However, the histogram shows decreasing negative momentum, suggesting a slowdown in selling pressure.
Source: TradingView
Analyst’s Bearish Views
Ali warned that TON could face dip risks, citing the recent arrest of Telegram CEO Pavel Durov in Paris on August 25, 2024. Following this event, Toncoin network activity had a sharp decline.
Daily active addresses dropped from over 1,800 to just 181, and investors offloaded more than 860,000 TON tokens. 610,000 of these tokens moved to exchanges, indicating potential sell offs.
Adding to the bearish outlook, the super trend indicator has shown a sell signal on the three day timeframe. If TON breaks below the $4.63 support level, it could drop further to $3.77 or even $2.72, according to Ali.
He says monitoring is essential to see whether TON can reclaim the $5 resistance or if further downside movement is imminent. The coming days will be crucial in determining the asset’s next move.