The cryptocurrency behind Telegram, Toncoin (TON), drops after the arrest of its CEO: Analysis from August 28, 2024

Toncoin drops by 27% following the arrest of Pavel Durov. Let’s examine the future prospects for the TON price.

Toncoin (TON) Situation

While The Open Network ecosystem was booming, the crypto linked to Telegram outperformed the market by recording a performance of over 300% in less than 6 months. TON thus marked its all-time high at $8.29. Unfortunately, it was at this price level that the crypto faced selling pressure, which occurred during the overall crypto market downturn. It was only at the support of $4.80 that the crypto was able to find buyer support, allowing TON to appreciate up to $7.20. However, a few days later, an unexpected event again put pressure on the crypto’s price: the arrest of Pavel Durov, CEO of Telegram. The crypto project, initially associated with the app, reacted immediately. Indeed, Toncoin dropped by 20% on the day of the news and continued to decline in the following days.

At the time of writing this text, the Toncoin price is trading around $5.2. The short-term trend of the crypto is bearish, however, the medium and long-term trend remains positive. These observations are supported by the fact that the crypto is still above its 50 and 200-day moving averages. Nevertheless, TON’s momentum seems to continue to weaken, as evidenced by the crypto’s price itself as well as its oscillators, casting doubt on the cryptocurrency’s bullish recovery.

The current technical analysis was conducted in collaboration with Elie FT, an investor and passionate trader in the cryptocurrency market. Today, he is a trainer at Family Trading, a community of thousands of proprietary traders active since 2017. There you will find Lives, educational content, and support around financial markets in a professional and friendly atmosphere.

Focus on TON/USDT Derivatives

During the TON decline, it is interesting to observe that speculators’ interest has dramatically increased. This is reflected by a sudden increase in the open interest on TON/USDT contracts. Given the market’s direction and the downward observed CVD, it’s not surprising that traders’ sentiment regarding the future of the cryptocurrency price is negative. That said, it can be observed that the funding rate associated with these contracts suggests some buying pressure, having turned slightly positive. Considering liquidations, there was a spike during the sudden drop of TON, which created volatility and caused buy and sell liquidations exceeding 1 million dollars.

The liquidation heatmap of TON/USDT over three months shows that the crypto passed through the liquidation zone around $6. Unfortunately, this zone did not attract buyer interest, and TON continued to decline. However, TON then reached the liquidation zone between $5.4 and $5. This time, buyer interest seems to have manifested, as the crypto initiated a rebound. Now, the notable liquidation zones are above the current price. Firstly, there is the $6 zone. Higher, the area within the price range of $7.2 to $7.8 can be identified. Finally, and most importantly, the zone between $8.1 and $8.5. Approaching these levels could trigger a massive influx of orders, increasing the risk of a period of heightened volatility for the crypto. These zones thus represent a crucial point of interest for investors.

Hypotheses for the Toncoin (TON) Price

• If the TON price remains above $5, one could anticipate a break above $7. The next resistance to consider, if the upward movement continues, could be at $7.3, or even $7.7. Beyond that, one could aim for $8. At this stage, this would represent an increase of nearly 48%.

• If the TON price fails to remain above $5, one could envisage a return to levels of $4.8. The next support to consider, if the downward movement continues, would be around $4.6. Lower still, one could note the support at $4, or even $3.9. At this stage, this would represent a decline of about 27%.

Conclusion

Despite a strong initial growth, the crypto linked to Telegram has undergone significant selling pressure, exacerbated by unexpected events. While the medium and long-term trend remains positive, the current momentum shows signs of weakening, leaving uncertainties regarding a bullish recovery of TON. Therefore, it will be crucial to closely observe the price reaction to various key levels to confirm or refute current hypotheses. It is also important to remain vigilant against potential “fake outs” and “squeezes” in each scenario. Finally, let us remember that these analyses are based solely on technical criteria and that cryptocurrency prices can also quickly evolve based on other more fundamental factors.