Toncoin (TON) Rally Toward $6 Stalls, 20% Price Drop on the Horizon

Toncoin’s (TON) potential rise towards the $6 mark has hit a significant roadblock, with mounting signs of a potential pullback. After gaining momentum in recent days, the bullish sentiment has begun to wane.

 With Toncoin’s price action flashing warnings and market sentiment shifting, investors may need to brace for a potential correction. Here is how.

Toncoin Remains Overvalued

As of this writing, Toncoin’s price is $5.21. However, in the last 24 hours, the Network Value to Transactions (NVT) ratio has increased by 82%. The NVT ratio shows whether the market cap is growing faster than the transaction volume.

When the market cap increases faster than transaction volume, the cryptocurrency trades at a premium relative to broader market conditions. Conversely, a decline in market cap while transaction volume rises typically signals a bullish trend.

For TON, the rise in market cap over transaction volume suggests the altcoin may be overvalued. As a result, the price could face a potential decline rather than continuing its recent uptrend.

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Furthermore, 24-hour active addresses on the Toncoin network have declined. Active addresses indicate the level of user engagement with a cryptocurrency. When this metric rises, it signals increased interaction and activity among market participants.

Conversely, a decline suggests that investors are reducing their exposure, which indicates waning interest. If this trend continues, Toncoin’s price growth could face significant hurdles.

TON Price Prediction: Rebound Postponed

On the daily chart, Toncoin’s price finds itself approaching the 5.71 resistance. However, a closer look shows that the trading volume is not sufficient to help the token surpass that roadblock.

Typically, if the volume rises significantly alongside the price, then the token’s value can climb higher. On the contrary, a low volume when the price rises means the uptrend is weak, and reversal could be looming. 

In addition, bears are looking to push TON’s price back from $5.21. If successful, the token’s value could decline by 10% and drop to $4.62.

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However, Toncoin bulls could resist the downturn if they double down on increasing their position. In that instance, Toncoin’s price might break above the overhead resistance, potentially rallying toward $6.70.