The toncoin (TON) cryptocurrency has experienced a significant change in its risk zone, according to the latest data provided by analysis firm CryptoQuant.
According to the reportthe Sharpe Indicator TON has entered a low-risk zone for the first time in 12 months.
This indicator, crucial in the evaluation of risk-adjusted performance, suggests that TON is in a more stable and predictable environment.
Over the past 12 months, TON has faced high volatility, with its price fluctuating between $2 and $8. It is currently trading at $5.3, which represents a 35% drop from its all-time high.
However, it is precisely at this price point where the Sharpe Indicator has once again signaled a low risk environment. This level could be attractive to investors looking for assets with a better risk-reward ratio.as seen in the following graph.
The firm CryptoQuant notes that, on previous occasions, when TON entered a low-risk zone, it took some time for the market to bottom.
Historically, these low risk periods have been followed by a consolidation pattern before reaching a new low.
However, the firm warns that This trend will not necessarily be repeated, suggesting that investors should proceed with caution.
Despite the encouraging outlook, the report does not recommend buying directly at this time, but rather add TON to a watchlist or wait for clearer signals extremely low risk before acting.
The cooling of the Sharpe Ratio and the fact that the number of unique TON users has surpassed 100 million are factors that make the coin “begin to show renewed health,” says CryptoQuant.
What is the Sharpe ratio?
He Sharpe ratioalso known as Sharpe Ratio, is a financial metric used to measure the risk-adjusted return of an investment.
It was developed by economist William F. Sharpe in 1966 and has become one of the most popular indicators to evaluate the profitability of a portfolio or asset in relation to its level of risk.
A higher Sharpe ratio indicates that the investment has a better risk-adjusted return. That is, the asset or portfolio is obtaining a higher return in relation to the risk it is assuming.
Meanwhile, a lower Sharpe ratio suggests that the additional return does not compensate for the risk assumed.
Toncoin is boosted by the growth of the Ton network
Since January 1, 2024, when TON was trading at an average of $2.20, its value has increased by more than 127%, currently reaching $5.3, as seen in the chart below. TradingView.
This rise reflects the market’s confidence in the potential of the Ton network. Part of this success is due to its relationship with the Telegram ecosystemwhich has approximately 900 million users worldwide.
Toncoin is part of The Open Network (TON), a network co-created by Pavel Durov, founder of Telegram. The popularity of the Ton network became clear last week, when it exceeded 100 million unique users, as reported by CriptoNoticias.
This milestone represents an increase of 2,225% compared to the 4.3 million holders at the beginning of the year.
The explosive growth of the Ton network has benefited the performance of toncoin, driven in part by the integration of games on the Telegram platform.
An example of this success is Hamster Kombat, a gaming token launched on the TON network in September, which has contributed to further increasing the adoption of cryptocurrencies in the ecosystem.