TONCOIN Price Prediction: TON Struggles to Break $8 Amidst Weak Network Activity
thecryptobasic.com 23 August 2024 13:43, UTC Toncoin price saw a modest recovery on August 23, climbing 3.5% to trade above $6.60. This gain follows a rough start to the week, where the cryptocurrency experienced a 9.5% drop. However, diminishing Toncoin network activity suggests that this recovery may be short-lived, with the potential for further declines.
Toncoin Buyers Show Signs of Fatigue
As the cryptocurrency market recovered from the August 5 crash, Toncoin, along with Litecoin and XRP, quickly became top gainers. While XRP’s rally was fueled by a favorable court ruling in the Ripple vs. SEC case, Toncoin price benefited from Russia’s new law legalizing crypto mining on August 8, which also provided a boost to other Proof-of-Work (PoW) coins like Litecoin and Bitcoin.
Given Toncoin’s strong ties to the Russian market, the cryptocurrency outperformed both Bitcoin and Litecoin. After a volatile start to the month, Toncoin price dipped to a three-month low of $4.78 on August 5. However, a sharp 48% recovery pushed it back to $7.10 by August 19. As of August 23, Toncoin’s price is holding at $6.60, reflecting a 3.5% increase over the past 24 hours. Despite this short-term gain, the market appears to be entering a consolidation phase.
The recent consolidation suggests that many short-term traders, who bought Toncoin during the early August dip, are now cashing in on their profits. Toncoin price slipped below $6.50 on August 22, following four consecutive days of losses, marking a 9.5% retracement since August 18.
The inability to break past the $7.50 resistance level has dampened bullish momentum. Without fresh bullish drivers, Toncoin prices could face additional downward pressure in the coming days.
Toncoin Network Activity Plummets 40%
The recent Toncoin price surge was largely driven by speculative traders capitalizing on bullish news from Russia’s crypto mining legalization. However, on-chain data reveals a significant drop in Toncoin network activity, which could limit further price gains.
The Network Fees metric provides critical insights into investor behavior in response to market conditions. Although bulls led the Toncoin price to a 48% rebound from August 5 lows, the focus has shifted towards speculative trading, reducing fundamental network engagement.
Between August 14 and August 21, Toncoin network fees decreased sharply from 15,650 TON to 9,500 TON, a 40% drop. This decline in network fees, which reflects economic activity on the Toncoin network, raises two primary concerns.
First, it indicates reduced transaction volumes, which may signal declining interest among investors. Historically, such declines in network activity have often preceded major price corrections, as reduced network engagement typically correlates with lower demand for the asset. Second, the decline could suggest that speculative traders are exiting their positions, potentially leading to increased selling pressure.
TON Price Prediction: Further Downside Possible
The technical outlook for Toncoin price suggests potential further declines, with the possibility of retesting the $6 support level. Technical indicators point to a bearish trend, with the Relative Strength Index (RSI) at a neutral 50.60, showing a lack of strong momentum in either direction.
Toncoin price faces significant resistance at the $7.50 level. Failure to breach this resistance could trigger more selling, pushing the price toward the $6.37 support. A break below this level could see Toncoin price falling further, with $6.00 serving as a critical support zone.
In conclusion, the Toncoin price may struggle to maintain its recent gains amid declining network activity and a lack of new bullish catalysts. Without renewed buying interest, a retest of the $6 support level seems likely in the short term.
