Toncoin’s Meteoric Rise Warns of Potential Market Saturation

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In recent times, the crypto world has experienced an exhilarating surge from one often-overlooked player – Toncoin (TON). Accumulating a striking gain of over 221% since the dawn of 2024, this Telegram-integrated token has moved into the limelight, securing a formidable place amongst the top 10 cryptocurrencies as per market cap. Nevertheless, amidst TON’s captivating ascent, a certain technical indicator warns of a potential decline looming in the following weeks.

Shiven Moodley, an esteemed analyst from the data analytics platform, CryptoQuant, suggests an impending overvaluation of TON, citing its Adjusted Sharpe Ratio. To grasp his theory, the Adjusted Sharpe Ratio, it’s important to understand that it’s a measure calculating the risk-related excess returns on investment. Additionally, it takes into account multiple other factors affecting the risk-adjusted return, offering a more holistic view of an asset’s performance.

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Moodley’s in-depth examination of TON’s Adjusted Sharpe Ratio reveals that TON’s 7-day volatility has continuously surpassed its 30-day volatility for the past two and a half years. Essentially, Toncoin experiences more pronounced short-term price oscillations in contrast to its long-term price movement, suggesting that the asset is acutely responsive to short-term events. The prevalence of such sporadic fluctuations is attributable to the speculative nature of TON as well as the mounting number of Telegram users in the DeFi and GameFi sectors, causing this significant volatility to occur at a foundational level.

However, the current 180-day Sharpe Ratio analysis implies the possibility that TON’s price might be nearing a saturation point. Consequently, its recent monetary gains may not weather the test of time, with a probable price drop expected in the imminent future.

Given this market prognosis, short-term traders might find an opportunity to capitalize on this volatility, a strategy that though potentially profitable carries high risk. In contrast, for long-term investors, it’s noteworthy that TON’s extended period price movement is perceivably steadier and lower as evident from the 30-day volatility metric.

At present, Toncoin trades at $7.38, reflecting a 3.36% decline within a day. Despite this, over broader timescales, Toncoin showcases a commendable performance, registering an impressive 17.64% growth over the past week. Furthermore, TON’s daily trading volume is in the green, having escalated by 11.57%, and is valued at approximately $402.12 million. With a hefty market cap of $17.96 billion, TON proudly secures its ninth position amongst the world’s largest crypto assets.

Trading at $7.397 on the 4-hour chart, Toncoin’s journey exemplifies the volatility and constant evolution that is characteristic of the crypto market, yet its performance offers potential and intrigue to both short-term and long-term investors.