Toncoin (TON) is currently facing a strongly bearish short-term bias. Traders are advised to wait for a deviation beneath the range lows before considering long positions. This cautious approach is due to several recent developments that have significantly impacted the token’s performance and market sentiment.
Impact of Pavel Durov’s Arrest
The founder of Telegram, Pavel Durov, was recently arrested in France, facing serious charges that could lead to a 10-year jail term. This news has had a profound negative impact on Toncoin, given its close association with Telegram. The arrest has shaken investor confidence, leading to a sharp decline in TON’s value. The uncertainty surrounding Durov’s legal situation adds a layer of risk for potential investors and traders.
Network Downtime and Its Consequences
Adding to the woes, the Toncoin network experienced a significant downtime of over seven hours. This outage further eroded user confidence, as the reliability of the network came into question. Although the network has since been restored, the incident highlighted potential vulnerabilities and has made users wary. Over time, the restoration might ease some concerns, but the immediate impact has been detrimental.
Range Formation and Price Action
In June and July, Toncoin formed a range with lows at the $6.94 level. However, selling pressure in late July pushed prices down to $4.75, turning the $6.94 level into a formidable resistance. Recent price action supports the idea of this range formation, with the mid-range level acting as resistance over the past week. A move towards the $5.13 local lows seems likely, given the current market conditions.
Technical Indicators
Technical indicators paint a bleak picture for Toncoin. The Relative Strength Index (RSI) shows bearish momentum, while the On-Balance Volume (OBV) highlights rising selling pressure. These indicators suggest that the chances of a short-term recovery are low, and a move towards the $5 mark appears possible. Traders should be cautious and consider these signals before making any trading decisions.
Shorting Toncoin: A Viable Strategy?
Given the current market conditions, should traders consider shorting Toncoin? Recent data indicates that the cumulative liquidation levels delta is negative, showing that short positions outnumber long ones. While a short squeeze is possible, it is unlikely to occur in the next 24–48 hours. Traders should remain vigilant and monitor the market closely for any signs of a reversal.
Liquidity Pools and Support Zones
The daily chart reveals that the $5.13 level serves as a support zone. However, liquidity pools in the $4.92-$5 range are densely populated with long liquidations. Once the price sweeps this level, a recovery might become more likely. In the meantime, traders should be wary of minor price bounces that could be attempts to hunt liquidity.
Conclusion
Toncoin is currently navigating through a challenging period marked by legal troubles for its founder and technical issues within its network. These factors have contributed to a bearish short-term outlook. Traders are advised to exercise caution and wait for clearer signals before making any significant moves. The market’s reaction to these developments will be crucial in determining Toncoin’s future trajectory.
