Toncoin Faces Bearish Sentiment as Price Drops Below $5 Amidst Broader Crypto Decline

On November 1, Toncoin (TON) dropped below $5 after holding steady for several days. This decline has led traders to expect further drops, reflecting the recent losses seen in Bitcoin (BTC) and other cryptocurrencies.

In Toncoin's case, recovery might be tough, even if the overall market bounces back.

The market sentiment for Toncoin has turned bearish. According to Coinglass, the Long/Short ratio for Toncoin is now at 0.88. This ratio helps traders see the balance between long positions (buyers) and short positions (sellers).

If the Long/Short ratio is above 1, it means more traders are betting on price increases. But when it drops below 1, it indicates a bearish outlook with more traders going short.

BeInCrypto reports that 53% of traders with open positions are shorting Toncoin, while about 47% are long. This shows a general bearish sentiment around the altcoin.

There’s a strong reason behind this sentiment. On-chain data from Santiment shows a significant rise in the Mean Dollar Invested Age (MDIA). This metric reflects the average age of all tokens on a blockchain, weighted by purchase price.

A declining MDIA usually suggests active token movement, which could lead to price increases. However, the recent rise in MDIA indicates that many Toncoin tokens have been inactive. If this trend continues, Toncoin may struggle to gain upward momentum.

As of now, Toncoin's price is $4.87. The daily chart reveals that it fell below this mark due to low buying volume. Following this, TON has dropped below crucial Exponential Moving Averages (EMAs).

A rising EMA typically supports an uptrend, acting as a dynamic support level. On the flip side, a falling EMA often acts as resistance, making it hard for prices to climb. Currently, Toncoin is below both the 20 (blue) and 50 (yellow) EMAs, signaling a bearish trend. If this continues, the altcoin could fall to $4.46, which might lead to profits for many Toncoin traders.

However, if the cryptocurrency manages to retest the 23.6% Fibonacci retracement level, it could bounce back to $6.20.