Toncoin’s price dropped sharply by over 20% after Telegram CEO Pavel Durov’s arrest in France over alleged content moderation failures, as per reports on Watcher Guru. This article analyzes the short-term and long-term implications for Toncoin, exploring market reactions, technical indicators, and the potential impact of ongoing legal issues.
Quick Take
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Pavel Durov, Telegram’s CEO, was arrested in France on August 24, raising concerns within the cryptocurrency community.
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Toncoin (TON), closely linked to Telegram, experienced a significant price drop of over 20% following the news. Toncoin’s market performance remains volatile, with bearish technical indicators signaling caution for the short-term.
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TON ecosystem has good fundamentals despite that Durov’s legal issues could cast a shadow on Toncoin’s long-term growth.
Telegram CEO Pavel Durov’s Arrest Shocked the Crypto World
Telegram CEO Pavel Durov arrested | Source: X
On August 24, 2024, Pavel Durov, the founder of Telegram, was arrested at Le Bourget Airport in France. According to Watcher Guru, French authorities detained Durov after an investigation linked the messaging platform to widespread illegal activities, including drug trafficking, fraud, and even terrorism. His arrest sent shockwaves through the cryptocurrency space, particularly impacting Toncoin (TON), which was initially developed by Telegram.
The Link Between Telegram and Toncoin
Toncoin originated as part of Telegram’s broader vision to create a decentralized ecosystem through the Telegram Open Network (TON). Although Telegram officially distanced itself from the project following a legal dispute with the U.S. Securities and Exchange Commission (SEC) in 2020, the TON Foundation and a group of independent developers continued its development.
Given the historical connection between Telegram and TON, the market quickly reacted to Durov’s arrest, leading to a 15% drop in Toncoin’s value, which fell from $6.88 to $5.35. Investors were alarmed by the news, causing a sharp sell-off that extended into the following days.
Read more: A Deep Dive Into The Open Network (TON) and Toncoin
Telegram Community Expresses Support for Durov
In response to the arrest, Telegram released a statement expressing concern while maintaining that the company remains committed to its user base. Despite this, the platform’s large user community, which recently crossed 950 million, has been affected. Many users rely on Telegram for various crypto-related activities, including engaging with mini-apps and blockchain-based games like Hamster Kombat.
The arrest of Telegram founder Pavel Durov continues to escalate, with 12 charges of cybercrime. India and the UAE are following up with investigations. The Ton community has launched a campaign to support the Telegram CEO, urging members to change their social media profile pictures to participate. Meanwhile, Elon Musk and many other celebrities have also expressed their support for the founder of Telegram. The TON community has officially recommended the use of the Resistance Dog logo hand-painted by the founder of Telegram in 2018 to support, and some platforms have updated the TON token logo to Resistance Dog.
Read more: Top Telegram-Based Crypto Games to Watch
Toncoin Price Witnessed 21% Loss in 7 Days
TON price changes since Pavel Durov’s arrest | Source: X
At the time of writing, Toncoin has witnessed a 21% loss in 7 days and is currently trading at around $5.29, reflecting a modest recovery after the initial shock. However, technical indicators reveal a mixed outlook. The MACD shows a bearish crossover, indicating potential downside momentum, while the RSI hovers near oversold territory at 35.35. This suggests that while Toncoin faces selling pressure, it could also be nearing a bottom, presenting a possible opportunity for a bounce.
On the four-hour chart, TON’s price trend reveals a symmetrical triangle pattern, with the asset currently struggling to break above the $5.50 support level. A failure to hold this line could lead to further declines, with a key support zone at $4.72.
Open Interest of TON Futures Up By 20% in 24 Hours
TON Furures’ Open Interest (OI) on the rise | Source: CoinGlass
Toncoin’s derivatives market has also been highly active. In the 24 hours following Durov’s arrest, TON’s open interest surged by 20%, with over $59 million in new contracts, according to CoinGlass analysis. This spike in speculative trading suggests that many traders are betting on continued volatility. Notably, the majority of these positions are short, reflecting bearish sentiment among market participants.
Interestingly, despite the sharp price drop, long positions remain resilient, signaling that some traders expect a recovery in the near term. If this sentiment persists, Toncoin could stage a rebound, with resistance levels at $6.00 and $6.50 being critical hurdles.
Long-Term Outlook for TON Remains Positive Despite Short Term Shadow
Legal battles of Telegram CEO might cast shadow on its price trajectory. For example, Ripple’s ongoing lawsuit with the SEC has significantly hindered XRP’s price growth and adoption. Similarly, Durov’s legal troubles could dampen confidence in Toncoin, especially if the case drags on.
Telegram’s global influence and its ability to drive TON projects could be at risk if heightened scrutiny leads to regulatory action. However, the TON ecosystem remains strong on the fundamental level. Telegram’s revenue-sharing model, which distributes 50% of ad earnings in TON tokens to channel owners, has attracted a growing developer community. This influx of developers has improved the platform’s user experience and, coupled with the Mini Program TMA, lowered the entry barrier for those new to blockchain.Additionally, mini-games integrated with Telegram’s social features have created a positive growth cycle. As exchanges compete for Telegram's traffic, which boasts an active user base of 900 million, TON-related activities are increasing markedly.
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Conclusion: What’s Next for Toncoin?
In the short term, Toncoin could experience a technical rebound, especially if it manages to break above key resistance levels. However, the broader outlook offers some positive signs, especially due to the strong growth of Telegram and TON network ecosystems on both developers and end users’ sides. Investors should closely monitor the situation, as prolonged legal issues could weigh heavily on Toncoin’s long-term growth prospects.
For now, Toncoin remains in a precarious position, balancing between a potential recovery and the risk of further declines. The outcome of Durov’s legal battle will likely determine whether Toncoin can reclaim its previous highs or face continued downward pressure.
Read more: Toncoin Price Prediction: Will It Hit $10?
