Toncoin Surges 45% on Durov's Release, But Weak Metrics Loom

Toncoin (TON) has experienced a significant price surge, rising by 45% from its lowest point this month. This increase was driven by a combination of factors, including a broader rebound in cryptocurrency prices and the release of Pavel Durov from French custody. Durov, the founder of Telegram, was arrested in 2024 and faced several serious allegations, including complicity in managing an online platform that facilitated illegal transactions, refusal to cooperate with authorities, drug trafficking, and money laundering. His release allowed him to leave France, which sparked a rally in the Toncoin market.

Despite the positive news, there are concerns that the Toncoin price surge may be short-lived. One of the primary reasons for this skepticism is the weak on-chain metrics of Toncoin. Data from TonStat indicates that the inflation rate of TON has been rising, currently standing at 0.40%, up from 0.33% in October. This increase in inflation is accompanied by a surge in the total supply, which has reached over 5.124 billion. Additionally, the number of transactions per day has plummeted to 2.15 million from nearly 20 million in September of the previous year. The number of active wallets in the TON Blockchain has also been declining, and the total value locked in its DeFi ecosystem has dropped to $180 million from almost $800 million a few months ago. STON.fi, the largest DEX network on the TON Blockchain, handled only $7.1 million in the last 24 hours, indicating a significant decrease in activity.

Another factor contributing to the potential short-lived nature of the Toncoin surge is the performance of other tokens within the TON Blockchain. Tokens such as Hamster Kombat (HMSTR), Catizen (CATI), and Tapswap have experienced significant crashes, erasing billions of dollars in value. This decline in the value of associated tokens could further impact the overall market sentiment towards Toncoin. Additionally, historical data suggests that traders often overreact to major news events and subsequently sell their holdings, which could lead to a drop in Toncoin's price as the excitement around Durov's release fades. A similar pattern was observed with Cardano, where the price initially rose after being included in President Trump’s stockpile but later tumbled by double digits.

Technical analysis of Toncoin's price chart shows that the token has bounced back after reaching a low of $2.3650 this month. It rose to a high of $3.50, coinciding with the 50-day moving average, which indicates substantial resistance. The token also found resistance at the weak, stop, and reverse point of the Murrey Math Lines. This technical setup suggests that Toncoin may resume its downtrend and move below $3 as the news of Durov's release starts to fade. The daily chart further supports this analysis, showing that the token has found significant resistance at key levels, which could lead to a reversal in its price trend.

In conclusion, while the recent surge in Toncoin's price has been driven by positive news and a broader rebound in cryptocurrency prices, the sustainability of this rally remains uncertain. Weak on-chain metrics, declining activity, and the potential for traders to sell their holdings as the news fades all point to a possible short-lived surge. Investors should closely monitor the developments surrounding Durov's legal proceedings and the overall market sentiment towards Toncoin to make informed decisions. The coming weeks will be crucial in determining the long-term trajectory of Toncoin and its place in the cryptocurrency market.