Toncoin [TON], a cryptocurrency closely tied to the Telegram messaging app, has faced significant challenges this past week. The arrest of Telegram’s founder, Pavel Durov, in France has sent shockwaves through the market, with Durov now facing a potential 10-year jail sentence. The impact on Toncoin was immediate and severe, leading to a sharp decline in its value and confidence among investors.
Network Downtime Adds To The Woes
Compounding the crisis, the Toncoin network experienced an extended downtime of over seven hours. This technical glitch further eroded user trust, raising concerns about the network’s reliability. While the network has since been restored, the damage to Toncoin’s reputation may take time to repair.
Despite these setbacks, some analysts believe that the restoration of the network could gradually ease the negative sentiment. However, the immediate outlook for Toncoin remains bleak, with many traders wary of further price declines.
Has Toncoin Formed Another Range?
In recent months, Toncoin’s price action has been marked by significant volatility. In June and July, the altcoin established a trading range with a low at the $6.94 level. However, intense selling pressure in late July pushed prices down to $4.75, turning the $6.94 mark into a formidable resistance level.
Over the past month, Toncoin’s price movements have supported the idea of a new range formation. The mid-range level has acted as a resistance point over the past week, and a further drop toward the $5.13 local low seems increasingly likely.
The technical outlook for Toncoin is not encouraging. The Relative Strength Index (RSI) is showing bearish momentum, and the On-Balance Volume (OBV) indicates rising selling pressure. These signals suggest that a recovery in Toncoin’s price is unlikely in the short term, with a move toward the $5 mark appearing possible.
Should Traders Short Toncoin?
Given the current market conditions, many traders are considering short positions on Toncoin. Analysis from AMBCrypto reveals that the cumulative liquidation levels delta is negative, indicating that short positions have outpaced long ones in recent days.
Also Read: Toncoin Surges to $13.96B Market Cap as Daily Active Users Hit 1.1M
While a short squeeze—a rapid increase in price due to traders covering their short positions—is possible, it is unlikely to occur in the next 24 to 48 hours. The daily chart shows that the $5.13 level serves as a support zone, but the presence of dense long liquidations between $4.92 and $5 could drive the price lower before any recovery begins.
In the meantime, traders should be cautious of minor price bounces that may be aimed at hunting liquidity. The road ahead for Toncoin looks challenging, and those considering short positions should remain vigilant in this volatile market.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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