Toncoin nears a dreaded pattern despite strong on-chain metrics

The Toncoin token remained in a bear market and was at risk of forming the dreaded death cross pattern, despite strong on-chain metrics.

Toncoin (TON) was trading at $5.81 on Monday, Sep. 30, down by over 30% from the year-to-date high.

Strong on-chain metrics

Additional data showed that the number of on-chain activated wallets has risen to over 20.8 million, a significant increase from January’s low of 1.1 million.

Moreover, the number of Toncoins burned daily has continued to rise, reaching the year-to-date high of almost 39,000. These burns have coincided with a sharp decline in the number of minted Toncoins, which has dropped to 39,000 from this month’s high of over 50,000.

Role in DeFi is fading

Toncoin’s price has likely retreated due to its waning role in the decentralized finance industry, where the total value locked in the network has dropped from over $765 million in July to $427 million.

TON has moved from being a top ten player in the DeFi industry to becoming the 20th-biggest chain. Smaller chains such as Core, Mode, Mantle, and Linea have surpassed it in recent weeks.

Toncoin has also dropped because of Pavel Durov’s recent arrest in France and the performance of its tap-to-earn tokens. Hamster Kombat, which launched its airdrop last week, has dropped by almost 60% from its highest level.

Similarly, Notcoin (NOT) dropped by 71%, while Catizen (CATI) has fallen by 50% from their all-time highs. Most of all the recently launched Telegram’s tap-to-earn tokens have dropped to record lows.

Meanwhile, Toncoin’s futures open interest dropped to $260 million on Sep. 30, down from the year-to-date high of over $360 million. This figure has reached its lowest point since Sep. 12, indicating waning demand.

Toncoin price analysis

Toncoin’s token has dropped by over 30% from its year-to-date high, and the 50-day and 200-day Exponential Moving Averages are close to forming a death cross pattern. The last time it formed this pattern in May of last year, it resulted in a drop of over 50%.

TON has also formed a head and shoulders and a rounded top pattern. It remains below the first support level of the Andrew’s pitchfork tool and the 23.6% Fibonacci Retracement level.

Therefore, Toncoin may have a bearish breakout to the next key support at $4.45, its lowest point in September, unless it moves above the 50-day and 200-day moving averages.