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Why Toncoin’s recovery may not be sustainable – Mixed signals emerge
Toncoin has seen a significant price rise of 3.6% to $6.39 in recent times. However, mixed signals have emerged that cast doubt on the sustainability of this recovery.
Despite the uptick in price, network activity, including swaps and active addresses, has taken a hit. Data from CryptoQuant reveals that decentralized exchange (DEX) engagement is in decline, with a decrease in the number of swaps and available liquidity pools on platforms such as Stone.FI and DeDust. In the past, this type of decreased DEX activity has been linked to price corrections.
Historically, increased DEX activity has correlated with rising TON prices, while reduced engagement has accompanied price drops. This trend suggests that Toncoin’s recent price volatility, which has seen it fluctuate between $7.20 and $5.20, may have led to a decrease in interest among traders and liquidity providers.
On the other hand, data from Coinglass indicates that Toncoin’s Open Interest – a measure of outstanding derivative contracts – has seen a significant increase of 2.77% to $214.07 million. Additionally, the volume of these open positions has risen by 7.10%, now valued at $169.73 million.
These metrics suggest renewed interest in TON’s derivatives market and potentially signify a more optimistic outlook for the cryptocurrency.
However, a closer examination of Glassnode data reveals an unsettling trend – Toncoin’s active addresses have been consistently declining since late October, dropping from 3.8 million to just 1 million by December 15th.
The stark decline in active addresses may indicate waning user engagement and participation in the TON ecosystem, potentially limiting network growth and adoption.
Source: ambcrypto.com
