The arrest of Pavel Durov, the CEO of Telegram, has significantly impacted Toncoin (TON), the cryptocurrency associated with the messaging platform. Previously, TON had been performing remarkably well, with a surge of over 300% in less than six months, reaching an all-time high of $8.29. This impressive rally was primarily driven by the flourishing ecosystem of The Open Network (TON), which saw considerable investor interest. However, the arrest of Durov has led to a sharp decline, with the cryptocurrency dropping by 20% on the day of the news and continuing to fall in the subsequent days. At present, Toncoin is trading at around $5.2, reflecting a bearish short-term trend.
The medium and long-term prospects for TON, however, remain positive as the cryptocurrency is still above its 50 and 200-day moving averages. Despite this, the momentum appears to be weakening, as indicated by the price action and oscillators, casting doubts on the potential for a bullish recovery. Technical analysis conducted in collaboration with Elie FT, a seasoned cryptocurrency trader and investor, suggests that while the immediate outlook is bearish, there are key levels and zones that could influence future price movements.
One notable observation during the decline of TON is the heightened interest from speculators, as evidenced by the increase in open interest on TON/USDT contracts. The market sentiment appears to be negative, with a downward trend in the cumulative volume delta (CVD). However, the funding rate for these contracts has turned slightly positive, indicating some buying pressure. The sudden drop in TON’s price also led to a significant spike in liquidations, exceeding $1 million, which contributed to increased volatility.
The liquidation heatmap for TON/USDT over the past three months reveals that the cryptocurrency passed through a critical liquidation zone around $6, which failed to attract buyers, leading to further decline. However, the zone between $5.4 and $5 has shown some buyer interest, resulting in a rebound. Moving forward, investors should closely monitor the significant liquidation zones above the current price, particularly around $6, $7.2 to $7.8, and $8.1 to $8.5. These levels could trigger substantial order influxes, leading to periods of heightened volatility.
Hypothetically, if Toncoin manages to stay above the $5 mark, there is potential for a breakout above $7, with subsequent resistance levels at $7.3, $7.7, and ultimately $8. This would represent a nearly 48% increase from the current price. Conversely, if TON fails to hold above $5, it could drop to $4.8, with further support at $4.6, $4, and potentially $3.9, marking a decline of approximately 27%.
Despite the initial strong growth, Toncoin has faced significant selling pressure exacerbated by unexpected events like the arrest of its associated figurehead, Pavel Durov. While the medium and long-term trends remain positive, the current momentum shows signs of weakening, leaving uncertainties regarding the cryptocurrency’s recovery. Investors should pay close attention to the price reactions at various key levels to validate or refute current hypotheses. It’s also crucial to remain vigilant against potential “fake outs” and “squeezes” in each scenario, bearing in mind that these analyses are based solely on technical criteria and that cryptocurrency prices can rapidly evolve due to fundamental factors.
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