Toncoin (TON) seems to have entered an interesting stage in its market cycle, offering potential opportunities for investors. According to a recent analysis by CryptoQuant analyst Joao Wedson, TON is now in a favorable risk zone for accumulation, as evidenced by the Normalized Risk Metric (NMR).
This particular metric assesses an asset’s price risk against its historical data, giving investors a better understanding of whether current price levels are ideal for investment or if a more cautious approach is advisable.
Toncoin Current Market Outlook
The NMR utilizes moving averages, including the 50-day and 374-day simple moving averages (SMA), along with logarithmic differences in the price data, to gauge risk exposure. A normalized score ranging from 0 to 1 indicates the level of risk; values closer to zero suggest a reduced likelihood of a price drop. According to Wedson, TON’s position within the green zone points to lower risk, making it an attractive option for those looking to hold the asset in the long term.
The analysis also points out that while medium and long-term risk profiles appear promising, there’s still a possibility for TON’s price to revisit key historical support levels, often depicted as the "blue zone" on price heatmaps.
Historically, these levels have acted as price floors and accumulation zones for investors anticipating future price growth.
Open Interest Decline and Market Volatility Trends
In addition to this, another CryptoQuant analyst, Maartunn, shed some light on the current market position of Toncoin. He observed that TON’s Open Interest (OI) in the futures market has dropped to $141 million, its lowest in nine months.
Open Interest represents the total value of all outstanding futures contracts and serves as a key gauge of market sentiment and engagement. A drop in Open Interest generally indicates a decrease in market activity and a dip in volatility. While this trend specifically affects TON, it mirrors a wider pattern seen across the cryptocurrency market as the year draws to a close.
Historically, periods characterized by low Open Interest are typically followed by substantial price movements, in either direction, once liquidity re-enters the market. Lower Open Interest paired with Toncoin’s favorable risk metrics might indicate a phase of price stability and reduced volatility.
Risk-Adjusted Returns and Drawdowns: A Look at Unrealized Profits in TON
"The Open Interest and Funding Rates chart complements this narrative by showcasing consistent open interest levels, reflecting sustained participation in the TON ecosystem," as highlighted by @ShivenMoodley on CryptoQuant’s Twitter.
[Image and chart source: DALL-E, TradingView]
