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Toncoin’s Risk Exposure Ratio – Here’s why traders should look out for it
The crypto market is known to be unpredictable and highly volatile, and Toncoin [TON] has been no exception in recent times. Over the past week, Toncoin’s risk exposure ratio has seen a significant surge, which may not necessarily be a bad sign for traders. In fact, this development could signal growing market confidence.
According to Cryptoquant analyst Joao Wedson, the risk exposure ratio of Toncoin has recently spiked, indicating that the risk level within the Toncoin network is moderately high. This increase in risk exposure is attributed to the significant portion of TON’s TVL being allocated towards lending, derivatives, and options – all highly exposed to market liquidity risks.
The sustained uptrend in this metric could be an indication of rising capital inflows into leveraged financial products like loans and derivatives. While this may raise concerns about stability, it can also be seen as a sign of growing optimism within the market trend. In other words, the increased demand for these derivative markets can be viewed positively by speculative traders who seek to capitalize on these opportunities.
It is worth noting that Toncoin’s risk exposure ratio has been trending upwards since its last major price surge, suggesting a clear correlation between the two metrics. As such, it could be argued that this uptick is a reflection of growing market confidence and bullish sentiment.
Furthermore, recent data suggests that supply on exchanges has dropped from 1.9 million to 1.82 million over the past week. This decline in supply can be seen as an indication of increased accumulation, with investors transferring their TON tokens into private wallets for self-custody – a trend that typically precedes significant price movements.
Additionally, whales have become increasingly bullish in recent times, with net flows turning positive to 122.33 million TON tokens over the past three days. This implies that large holders are now buying more tokens than they are selling, another indication of growing confidence within the market.
It is also worth noting that Toncoin’s price DAA divergence has remained positive throughout this period. A positive DAA divergence indicates that recent price gains have been supported by a corresponding increase in active addresses – a sign of a healthy and strong fundamental backing to the asset.
In conclusion, it appears that the uptick in risk exposure ratio is driving more speculative traders into the market. If this trend and capital inflows continue, Toncoin may retest its $6.2 levels. However, if conservative investors become wary of the increased volatility and close their positions, TON could potentially dip to $5.4.
It remains to be seen which direction Toncoin will take in the near future, but for now, it is clear that the risk exposure ratio has become a key metric for traders to monitor.
Source: ambcrypto.com
