Toncoin (TON) now appears to have entered a notable phase in its market cycle, presenting potential opportunities for investors. A recent one analysis by CryptoQuant analyst Joao Wedson highlights that TON has entered a favorable risk zone for accumulation, as indicated by the Normalized Risk Metric (NMR).
This measure evaluates an asset’s price risk relative to historical data, providing a clearer picture of whether current price levels are suitable for investment or whether caution is warranted.
Toncoin current market outlook
The NMR uses moving averages such as the 50-day and 374-day simple moving averages (SMA) along with logarithmic differences in price data to determine risk exposure.
A normalized score between 0 and 1 indicates the level of risk, with values closer to zero indicating a lower probability of price decline. According to Wedson, TON’s current placement in the green zone indicates reduced risk, making it an attractive opportunity for investors seeking long-term exposure to the asset.
The analysis further suggests that while medium- and long-term risk profiles appear favorable, there remains a possibility of TON’s price visiting historically important support zones, often referred to as the “blue zone” on price heatmaps.
Historically, these levels have served as price floors and accumulation points for investors expecting future price appreciation.
Open interest rate decline and market volatility trends
Another CryptoQuant analyst, Maartunn, added further context to Toncoin’s current market position. According to his observations, TON’s Open Interest (OI) in the futures market has fallen to $141 million, the lowest level in the past nine months.
Open Interest refers to the total value of outstanding futures contracts and is a key indicator of market sentiment and participation.
A decline in Open Interest generally indicates reduced market activity and lower volatility. While this trend is specific to TON, it reflects a broader pattern in the cryptocurrency market as the year comes to a close.
Historically, periods of low open interest are often followed by significant price movements, both upward and downward, once liquidity returns to the market.
Lower Open Interest combined with Toncoin’s favorable risk metrics could indicate a period of price stability and reduced volatility.
Risk-adjusted returns and withdrawals: a look at unrealized gains in TON
“The Open Interest and Funding Rates chart complements this story by highlighting steady open interest levels, which demonstrate sustainable participation in the TON ecosystem.” – By means of @ShivenMoodley
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— CryptoQuant.com (@cryptoquant_com) December 24, 2024
Featured image created with DALL-E, Chart from TradingView
