Toncoin Enters Accumulation Phase as Open Interest Reaches Nine-Month Low
Toncoin (TON) is currently in a significant market cycle phase, offering investment opportunities. A recent analysis by CryptoQuant's Joao Wedson indicates that TON has entered a favorable risk zone for accumulation, as demonstrated by the Normalized Risk Metric (NMR).
The NMR assesses an asset's price risk relative to historical data, helping to determine whether current price levels are suitable for investment.
Toncoin Current Market Outlook
The NMR employs moving averages, including the 50-day and 374-day simple moving averages (SMA), along with logarithmic price differences to evaluate risk exposure.
A normalized score between 0 and 1 reflects the level of risk, with lower scores indicating reduced chances of price decline. According to Wedson, TON's current position in the green zone signals lower risk, appealing to investors seeking long-term exposure.
While medium- and long-term risk profiles appear favorable, there is potential for TON’s price to revisit historically significant support zones, known as the “blue zone” on price heatmaps.
Historically, these levels have acted as price floors and accumulation points for investors anticipating future price increases.
Open Interest Decline and Market Volatility Trends
Another CryptoQuant analyst, Maartunn, highlights additional context regarding Toncoin’s market situation. He notes that TON's Open Interest (OI) in the futures market has fallen to $141 million, the lowest level in nine months.
Open Interest represents the total value of outstanding futures contracts, serving as an indicator of market sentiment and activity.
A decrease in Open Interest typically suggests lower market activity and volatility. This trend in TON reflects a broader pattern observed in the cryptocurrency market as the year concludes.
Historically, periods marked by low Open Interest are often followed by significant price movements, either upward or downward, once liquidity returns.
The combination of lower Open Interest and Toncoin’s favorable risk metrics may indicate a period of price stability and reduced volatility.
Risk-Adjusted Returns and Drawdowns: A Look at Unrealized Profits in TON
“The Open Interest and Funding Rates chart complements this narrative by highlighting steady open interest levels, which demonstrate sustained participation in the TON ecosystem.” – By @ShivenMoodley
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— CryptoQuant.com (@cryptoquant_com) December 24, 2024
Featured image created with DALL-E, Chart from TradingView