96% of Toncoin (TON) Holders Are Currently Facing Losses

The cryptocurrency market has been experiencing significant volatility lately, and one coin that has felt the brunt of this downturn is Toncoin (TON).

Cryptocurrency traders have largely grown accustomed to instances of extreme volatility, especially in the wake of the recent market downturn. However, even by these standards, the figures for Toncoin (TON) are staggering.

According to data from blockchain analytics platform IntoTheBlock, an overwhelming 96% of Toncoin investors are currently in the red. This grim statistic is a testament to the severity of the cryptocurrency’s ongoing price decline.

As the cryptocurrency remains in the lower reaches of its recent price ranges, investors are growing increasingly interested in the possibility of a recovery and what might come next for the coin.

MVRV Shows Magnitude of Toncoin Losses

The small sliver of investors who are currently in the green on their Toncoin investments will largely be those who bought the cryptocurrency at the very bottom of its recent price cycle, in the lower $2.00 ranges. From the beginning of 2024, however, the cryptocurrency has largely been in negative territory, slipping as low as $1.96 in mid-February.

This persistent downturn in price is also evident in the MVRV (Market Value to Realized Value) ratio, which tracks the difference between the price at which assets were purchased and their current market value. At the time of writing, the MVRV 30-day reading is at -10.15%, showcasing that most investors are sitting on unrealized losses.

A MVRV reading of 0% signifies that investors are collectively breaking even, while a positive reading indicates an overall profit for investors. Conversely, a negative MVRV reading, such as the one that has persisted for Toncoin, indicates that most investors are still in the red.

Declining On-Chain Activity Sounds Alarm Bells

In addition to the price drop, there has also been a sharp decline in the number of active daily addresses interacting with Toncoin. As of March 8, this figure stands at 126,454. This figure has been steadily decreasing since the beginning of 2024, showing a lack of new investors engaging with the cryptocurrency.

The decline in daily active addresses corresponds with the cryptocurrency’s price slump, showcasing how investor interest appears to be waning. This lack of activity suggests that there is minimal new investment in the cryptocurrency.

When looking at the number of new addresses being created, there has been minimal growth, especially when compared to other prominent cryptocurrencies. This trend further suggests that new investment is weak, and confidence in Toncoin may be diminishing.

When combined with the dismal MVRV readings, it paints a picture of a market that is far from bullish at this stage.

Toncoin Price Struggles to Break Key Levels

Technical analysis shows that Toncoin’s price has been stuck in a prolonged downtrend, struggling to break above key resistance levels and failing to regain its previous highs.

As the cryptocurrency attempts to recover, it has faced consistent rejection at the $3.24 resistance level, which aligns closely with the 50-day moving average. If Toncoin fails to break above this level, it may continue to experience downward pressure, with the next key support level appearing to be around $2.50.

Lack of upward momentum could be a concern for investors, who will be hoping to see some stability return to the cryptocurrency’s price.

If the cryptocurrency continues to struggle below key resistance levels, there is a risk that the coin could slip even further, potentially causing more pain for those already holding losses.

Could There Be A Short-Term Bounce?

Despite the bearish outlook, there are some signs of hope for Toncoin in the short term. Technical indicators such as the Relative Strength Index (RSI) are showing that the cryptocurrency may be nearing oversold conditions.

The RSI, which measures the magnitude of recent price changes to evaluate overbought or oversold conditions, currently sits at 42.06. This reading suggests that the asset could be approaching a price level where it may become undervalued in the short term.

If buyers step in and the market experiences a small recovery, it could lead to a short-term rebound for Toncoin, potentially pushing its price back towards the $3.00 to $3.25 range. However, unless there is a significant change in market sentiment, this rebound could be temporary, and Toncoin may face further declines after such a bounce.

What’s Next For Toncoin

The cryptocurrency markets have been volatile in recent times, and the future of Toncoin largely depends on how the broader cryptocurrency market evolves in the coming months.

For a recovery in Toncoin to take place, a shift in market sentiment will be necessary. The current lack of bullish momentum, combined with low MVRV readings, suggests that accumulation may still be in progress, and investors are hesitant to make large bets.

For a sustainable recovery to take place, Toncoin would need to reclaim key support levels and witness an uptick in on-chain activity