Toncoin Price at Risk as TON Wallets and DeFi Assets Face Sharp Decline

Toncoin (TON) has experienced a significant crash, entering a bear market after reaching an all-time high of $8.27 in June 2024. The cryptocurrency has plummeted by 57%, dropping to $3.53, which has led to a loss of around $9 billion in market capitalization. This fall saw the market cap shrink from $18 billion to $8.8 billion.

The price decline was triggered by a series of events, beginning with the arrest of Pavel Durov, the founder of Toncoin. Durov faced 12 serious charges in France, including drug trafficking, the sharing of child abuse images, and facilitating illicit transactions. This caused a ripple effect that damaged investor confidence and led to a sharp drop in the value of Toncoin.

The downturn intensified as several tokens within the Toncoin ecosystem underperformed. Notably, Hamster Kombat, which had been expected to reach a valuation of over $10 billion due to its 300 million users, crashed by more than 80%. As a result, its valuation dropped to just $103 million. Other tokens within the TON blockchain ecosystem, such as Tapswap, Notcoin, Catizen, and DOGS, also saw double-digit declines, contributing further to the overall negative sentiment.

On-chain data indicates that Toncoin’s network has also seen a decline in activity. According to TonStat, the number of active monthly wallets fell to four million, the lowest since July of the previous year. This is a significant drop from the 12 million monthly wallets in August. The number of on-chain wallet activations has also drastically decreased, from 655,000 in August to just 30,778. Other metrics, including daily transactions and annual inflation rates, have also been bearish, signaling that investor interest is waning.

Furthermore, Toncoin’s decentralized finance (DeFi) ecosystem has lost considerable ground. The total value locked (TVL) in Toncoin’s DeFi protocols has fallen to just $172 million, making it the 37th-largest blockchain in this area. Over the past 30 days, the decentralized exchange (DEX) protocols on the TON blockchain handled only $629 million in volume, a stark contrast to Base’s $40 billion in volume during the same period.

From a technical analysis perspective, Toncoin’s price chart reveals a “death cross” pattern, where the 50-day and 200-day exponential moving averages (EMAs) crossed each other. This is typically seen as a bearish signal. The coin has dropped below the key support level of $4.45, which had been its lowest point in early September 2024. Additionally, Toncoin has fallen below the 61.8% Fibonacci retracement level, indicating a continuation of its downward trend. Both the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) indicators are also signaling further bearish momentum.

Based on these technical indicators, Toncoin is expected to continue its decline, with the next key support level being around $2.68, which corresponds to the 78.6% Fibonacci retracement level.