Toncoin (TON), with its history of wild price swings, perfectly embodies the volatility that thrives in the cryptocurrency market. Prices often experience dramatic swings that can make even the most seasoned investors dizzy.
However, recent trends indicate so TON may be entering uncharted territory – a period of uncanny stability. This unexpected calm has set tongues wagging, with analysts predicting a potential explosion of volatility on the horizon.
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Low volatility indicates an approaching storm
Data analytics platform CryptoQuant has released data showing that TON is currently active trading near its all-time high. However, unlike previous surges that were marked by heartbreaking price increases, this rise was accompanied by a surprising decrease in volatility.
At the time of writing, TON was trading at $7.83, down 2.4% in the past 24 hours, but maintaining a 4.7% gain in the past seven days, Coingecko data shows. Based on this figure, TON is just a few cents away from hitting a new all-time high of $8.
There will be a low volatility warning $TON soon
“Periods of lower volatility are followed by periods of higher volatility… Therefore, based on this chart, it is reasonable to anticipate an increase in volatility.” – By means of @JA_Maartun
Link 👇https://t.co/HYoknuWpnV pic.twitter.com/asaR7IYv7k
— CryptoQuant.com (@cryptoquant_com) July 1, 2024
This is reflected in a chart that shows a steady price increase next to moderate ‘blue bars’, which presumably represent volatility levels. CryptoQuant analysts interpret this unusual calm as a sign of an approaching storm. They point to a historical pattern in Toncoin, where periods of low volatility have been followed by dramatic price swings, both up and down.
Potential price increase for Toncoin
Based on TON’s historical volatility and CryptoQuant’s analysis of the current low volatility phase, analysts expect a significant increase in volatility in the near future. This prediction is further strengthened by separate predictions pointing to a potential price increase of 227% for Toncoin by August 2, 2024.
The prospect of a dramatic price increase is undoubtedly attractive to investors. However, it is crucial to remember that the downside of high volatility is the potential for a sharp price drop.
Guidance for investors in a volatile market
Toncoin’s current phase offers investors a crucial decision point. The token’s low volatility can be viewed as a consolidation period, a time when the market gains strength before significant price movement, either up or down.
To help investors navigate this potential volatility spike, CryptoQuant recommends using on-chain metrics, which are data points generated by blockchain activity. By analyzing metrics such as trading volume, active addresses and transaction numbers, investors can gain valuable insights into market sentiment and potentially predict the direction of upcoming volatility.
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Looking beyond CryptoQuant
While CryptoQuant’s analysis provides valuable insights, investors should consider integrating the perspectives of other reputable analysts to form a well-rounded picture. Consulting technical analysis indicators and price forecasts from various sources can provide a more holistic understanding of potential market movements.
Furthermore, a deeper dive into the on-chain metrics themselves can provide a more detailed understanding of the market forces influencing the price of TON. This could look at trends in currency inflows and outflows, the number of new wallets being created and average transaction sizes.
Featured image from Pexels, chart from TradingView