Toncoin (TON) has experienced a modest recovery in recent days, with its price rising by 3.6% to $6.39. However, despite this uptick, the cryptocurrency faces mixed signals, as key metrics suggest a decline in network activity and engagement. Analysts are now questioning whether Toncoin’s recent rebound is sustainable in the face of these challenges.

Toncoin Sees Price Increase but Faces Declining Network Activity

After hitting a recent low of $5.53 on December 10, Toncoin has rebounded, experiencing a 3.6% increase in price. However, this growth is not without its concerns. Over the past week, TON has dropped by 3.3%, and in the last two weeks, it has seen a nearly 3.9% decline.

Despite the price uptick, Toncoin’s network activity shows signs of weakness. According to a CryptoQuant analyst, decentralized exchange (DEX) engagement has been on the decline, with a drop in the number of swaps and liquidity pools on platforms like Stone.FI and DeDust. Historically, increased DEX activity has been positively correlated with rising TON prices, while declining engagement often precedes price corrections. This trend raises concerns about the sustainability of Toncoin’s recent recovery.

Mixed Signals: Positive Momentum in Derivatives Market

While the decline in DEX activity paints a cautious picture for Toncoin’s price recovery, other metrics suggest that there may still be optimism in certain market segments. Notably, TON’s Open Interest has shown positive momentum, rising by 2.77% to reach $214.07 million. Additionally, the Open Interest volume has increased by 7.10%, now valued at $169.73 million. These figures indicate renewed interest in Toncoin’s derivatives market, which could be a sign of confidence from traders and investors.

Declining Active Addresses Raise Concerns About Long-Term Growth

Despite the positive momentum in derivatives, a deeper look into Toncoin’s user engagement raises further concerns. Data from Glassnode shows a significant decline in Toncoin’s active addresses, which represent the number of unique users interacting with the network. Active addresses have dropped sharply from 3.8 million in late October to just 1 million by December 15.

This decline suggests a reduction in retail participation and overall interest in the Toncoin ecosystem. As active addresses are a key indicator of network engagement and growth, this drop could pose a challenge for sustaining price momentum in the long term.

What’s Next for Toncoin?

Toncoin’s price recovery remains fragile, with declining DEX activity and a reduction in active addresses signaling potential challenges ahead. While there is positive momentum in the derivatives market, the overall decrease in network engagement raises concerns about the cryptocurrency’s long-term prospects.

The mixed signals leave analysts divided on whether Toncoin can sustain its recent rebound or if it will face another round of corrections. If the decline in active addresses continues, it could limit the network’s growth and adoption, potentially undermining any future price rallies.

Conclusion

Toncoin’s recent recovery has been met with both optimism and caution. While there are positive signs in the derivatives market, the decline in DEX activity and the drop in active addresses suggest that its recovery may not be sustainable in the long term. Investors will need to closely monitor these mixed signals to assess whether Toncoin can maintain its price momentum or if it will struggle to keep up with market demands.