Toncoin Price Could Crash As Burn Rate Drops

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As a seasoned crypto investor with over a decade of experience in this volatile market, I have seen my fair share of bull runs and bear markets. The recent sell-off in Toncoin, mirroring other altcoins, has left me somewhat concerned about its short-term prospects.

The price of Toncoin has experienced a significant downward shift, much like other alternative coins that have seen a decline this month. This drop in value increased notably following the Federal Reserve’s more aggressive stance on Wednesday. Key indicators such as increasing inflation within Ton, decreasing burn rate, and underperforming ecosystem tokens suggest that the coin might continue to decrease in value in the short term.

Toncoin Price At Risk As Burn Rate Drops

As a dedicated TON investor, I’m concerned about the potential impact on TON price given the deterioration in its fundamentals. According to TonStat, the daily number of Toncoin burned has plummeted to under 6,000, which is a significant decrease from the nearly 40,000 seen in September, marking an 85% drop. Typically, when fewer tokens are being burned, it could signal less activity on the network and potentially lead to a decline in price. In TON’s case, token burn occurs through fees generated by the network, so less burning might suggest reduced network activity. This is usually a cause for concern in the crypto world as a cryptocurrency often experiences downward pressure when there’s not much token burn happening.

The rate at which Toncoin is being destroyed has decreased, coinciding with an increase in Ton’s annual inflation rate, which reached its highest level since August (0.31%), significantly higher than the lowest rate observed so far this year (0.33%). This surge in inflation occurred alongside a consistent rise in the number of new Toncoins being minted daily, peaking at more than 84,000 on December 18, thereby expanding the supply.

More recent findings indicate that the revenue generated through transaction fees on the TON blockchain has consistently decreased. Specifically, it dropped from a peak of 78,000 TON this year to 11,505 TON on Wednesday.

TON Blockchain Ecosystem Struggles

Currently, the pace of the TON ecosystem seems to have slowed down. The value tied up in its DeFi platforms has been on a steady decline, with the current figure standing at approximately $275 million, compared to the year-to-date peak of $760 million.

Additionally, it’s worth noting that the majority of TON tokens have experienced a significant decline as the user base shrank. For instance, the Hamster Kombat token decreased by 22% over the last month, with only 2.7% of its holders seeing profits. In a similar vein, PunkCity plummeted by 34%, and Catizen dropped by 31% during this same timeframe.

Toncoin Technical Analysis: TON Could Fall To $4.440

Currently, the value of TON has reached a high of $7.10, creating a double peak formation. This double-peak structure includes two peaks and a horizontal line, often referred to as a ‘neckline’. In this instance, the neckline represents its lowest point on September 6 at $4.4392.

The price of Toncoin is now lower than both its 50-day and 100-day moving averages, suggesting an impending bearish trend. Additionally, it has fallen beneath the Ichimoku cloud, a technical indicator that often signals potential downturns.

Given the current situation, it appears the coin’s trend is leaning bearish. The predicted short-term goal is around $4.4392, representing a roughly 18% drop from the current price. This value is also slightly lower than the 50% Fibonacci Retracement mark. If we fall below this level, it could signal further decreases, possibly down to the 61.8% retracement point at $3.90.

Conversely, if the coin surpasses its crucial resistance at $6 (reached on September 27), the bearish perspective will no longer hold true.

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2024-12-19 17:22