- The correlation between the OI, price and active addresses indicated a potential drop to $4.93
- Late shorts may not get any reward as TON may soon begin a slow recovery
The number of active addresses on the Toncoin [TON] According to AMBCrypto’s analysis, the network has fallen from the notable peaks it reached on numerous occasions. At the time of writing, the number of 24-hour active addresses stood at 359. However, on April 24, the number was double that, while on April 11 the statistic was at a much higher level.
An increase in the number of active addresses implies an increase in the number of unique addresses transacting on the network. So this drop could be a sign that deposits and withdrawals on Toncoin have fallen.
Interestingly, TON’s pricing and network activity appear to be strong correlation. In fact, based on the chart below, one can argue that the price of TON increases almost every time the statistic in the charts increases.
Source: Santiment
Indicators point to a drop below $5
This also happened differently as soon as activity on the network disappeared. With this regard, it may not be out of place to predict a further decline in the value of TON. If this is the case, TON’s price could reach $4.93. Here it is worth noting that the Open Interest (OI) also recorded a decline in the charts.
For context, OI increases or decreases based on net position. If it rises, it means buyers are aggressive and the liquidity flowing into contracts is increasing. On the other hand, a decline implies that sellers are the aggressive sellers.
At the time of writing, Toncoin’s total OI had fallen to $140.33 million. From a trading perspective, this value could push the token into underlying support. So the value of TON could fall below $5 in the short term.
Moreover, market participants who were once confident in the cryptocurrency’s performance have switched to the other option. Proof of this was provided by the Weighted Sentiment. At the time of writing, the weighted sentiment stood at -0.866. This negative reading strengthens aforementioned conclusion, showing that most comments on TON were bearish.
Source: Santiment
TON is not dead
If this continues, TON demand could be difficult to come by. However, in the event that altcoins start to rise, sentiment surrounding the token could be in favor of a price increase.
Another way to assess TON’s short-term potential is to look at its liquidation levels. Liquidation levels show the estimated prices at which large-scale liquidation events could occur.
If a trader has any idea of this, it can give him an advantage over others without the data. Our analysis shows that many short positions could be liquidated if Toncoin rises to $5.78. At the same time, longs risk going bankrupt if TON falls to $5.02.
Meanwhile, the Cumulative Liquidation Levels Delta (CLLD) was negative at the time of writing. Here this indicator is the difference between open long liquidations and liquidations on the short side.
Is your portfolio green? View the TON Profit Calculator
As it stands now, the CLLD reading suggests that late shorts trying to catch the dip could be punished. This is because the sharp price drop could later cause a bullish bias, and TON could initiate a slow recovery.