Toncoin (TON) appears to have now entered a certain phase of its market cycle, presenting potential opportunities for investors. Recently analysis by CryptoQuant analyst Joao Wedson highlights that TON has moved into a favorable risk area for accumulation, as indicated by the Normalized Risk Metric (NMR).
This metric evaluates asset price risk compared to historical data, providing a clearer picture of whether current price levels are suitable for investment or whether caution is warranted.
Toncoin Current market overview
The NMR uses moving averages such as the 50-day and 374-day simple moving averages (SMA) along with logarithmic differences in price data to determine risk.
A standard score between 0 and 1 indicates the level of risk, with values closer to zero suggesting a lower chance of prices falling. According to Wedson, TON's current situation in the green zone indicates reduced risk, making it an attractive opportunity for investors seeking long-term exposure to the fund.
The study also suggests that, although the medium and long-term risk profiles appear to be favorable, there is still potential for the price of TON to revisit historically. important support areasoften referred to as the “blue zone” on price heat maps.
Historically, these levels have served as price floors and rallying points for investors anticipating future price value.
Decline in open interest and market volatility trends
Another CryptoQuant analyst, Maartunn, has added more context to Toncoin exchange rate today. According to his comments, TON Open Interest (OI) in the futures market has decreased to $141 million, marking the lowest level seen in the past nine months.
Open interest refers to the total value of separate futures contracts and is a key indicator of market sentiment and participation.
A reduction in Open Interest usually reduces symptoms market activity and lower volatility. Although this trend is unique to TON, it reflects a a wider pattern over the cryptocurrency market as the year ends.
Historically, periods of low Open Interest are often followed by significant price movements, either up or down, once liquidity returns to the market.
Lower Open Interest combined with Toncoin's favorable risk metrics could suggest a period of price stability and reduced volatility.
Risk-adjusted returns and drawdowns: A look at unprofitable profits in TON
“The Open Interest and Funding Rates chart complements this statement by highlighting stable open interest rates, which reflect sustainable participation in the TON ecosystem.” – With @ShivenMoodley
More… pic.twitter.com/DIpNabROij
— CryptoQuant.com (@cryptoquant_com) December 24, 2024
Featured image created by DALL-E, Chart from TradingView
