Toncoin is at risk as HMSTR, Catizen, Notcoin, and burn volume dive

Toncoin’s price continued its downward spiral on Monday, with a significant sell-off as most tap-to-earn tokens on its network saw sharp declines and burn volume dwindled. Toncoin (TON) dropped to $4.90, a 41% decline from its peak earlier this year. It has also fallen nearly 30% since August 24, the day its founder, Pavel Durov, was arrested in France.

The price decline coincides with mixed developments within the Toncoin ecosystem. On a positive note, stablecoin volume on the network surged past $1 billion for the first time, signaling increased usage of the platform. Most of this volume is driven by Tether (USDT), the largest stablecoin by market capitalization. An uptick in stablecoin activity suggests that the network is gaining traction, as stablecoins are the primary medium of exchange within the blockchain ecosystem.

However, despite this growth in stablecoin volume, Toncoin’s price has been under pressure due to weak metrics within its ecosystem. According to data from TonStat, the daily number of TON tokens burned has sharply fallen, with only 6,373 tokens burned recently, a steep drop from the year-to-date high of over 32,000. This decline in token burn activity is typically a bearish signal, as it indicates less demand for the token.

Further metrics show a sharp drop in network fees, which have plummeted to their lowest levels in months. After peaking at 77,000 TON in September, network fees have retreated to just 12,746 TON, pointing to reduced activity on the network. Additional on-chain data reveals that daily transaction volumes have continued to decline, reaching their lowest point in six months. The number of active wallets on the network has also seen a significant drop, further suggesting waning user engagement.

Taken together, these factors reflect a cooling in the Toncoin ecosystem, contributing to the ongoing price decline.

According to DeFi Llama, the total assets locked (TVL) in the TON blockchain have decreased to $375 million, dropping the network to 20th place in the rankings, down from its position among the top ten just a few months ago. This decline in TVL reflects the broader challenges facing the TON ecosystem as investor sentiment weakens.

Toncoin’s price has also been under pressure as investors track the poor performance of several key tokens within its ecosystem. Notably, tokens like Hamster Kombat (HMSTR), Notcoin (NOT), and Catizen have all seen significant drops from their peaks earlier this year, contributing to the overall negative market sentiment surrounding the TON network. The struggles of these ecosystem tokens are adding to the sense of uncertainty, further dampening investor confidence in Toncoin and its broader ecosystem.

Toncoin has formed a death cross

On the daily chart, Toncoin has experienced a significant decline over the past few months, firmly entering a deep bear market. The token has also formed a death cross, as the 200-day moving average has crossed below the 50-day moving average, a bearish signal that suggests further downside risk.

All key oscillators, including the Relative Strength Index (RSI) and the MACD, are indicating downward momentum. As a result, it seems likely that Toncoin will continue its decline, with traders targeting the next key support level at $4. This bearish outlook becomes more probable if the token falls below the critical support at $4.43, which marks its lowest point on September 7. If this level breaks, the downward pressure could accelerate, reinforcing the potential for further losses.