Toncoin (TON) has experienced substantial market turbulence after Telegram founder Pavel Durov’s arrest on August 25. The cryptocurrency’s value plummeted by over 25%, hitting a low of $4.45 on September 6. However, it swiftly rebounded by 15%, climbing back to above $5.15 by September 9.
Despite this recovery, Toncoin remains under pressure, with technical indicators suggesting the potential for further downside. The current market recovery could be a bull trap, with Toncoin possibly continuing its decline.
Bearish Continuation: 30% Decline Ahead?
Toncoin’s price chart exhibits an inverse cup-and-handle pattern, a bearish continuation signal. This pattern features a rounding top followed by a consolidation phase. If the price breaks below the neckline support, it could trigger further declines.
TON/USDT daily price chart. Source: TradingView
Toncoin slipped below its neckline support of around $5 on September 3, entering the pattern’s breakdown stage. By September 9, the price was testing the neckline as resistance. Failure to reclaim this level could signal that the bears are still in control, potentially leading to a further 30% decline, bringing Toncoin down to $3.60.
Global Crackdowns Against Telegram Intensify
Toncoin’s bearish outlook is compounded by its association with Telegram and Pavel Durov, particularly amidst growing global crackdowns against the messaging app. South Korea, India, and Indonesia are investigating or considering action against Telegram for various reasons, including facilitating illegal activities and failing to moderate content adequately.
TON Blockchain TVL. Source: Defi Llama
The negative sentiment surrounding these legal challenges could weigh heavily on Toncoin’s price as investors anticipate further instability. However, data from Santiment shows that Toncoin whales remain unfazed, with the largest investors increasing their holdings despite the recent negative news.
Additionally, the total value locked (TVL) across the Toncoin ecosystem has grown, driven by the launch of new projects, suggesting underlying network strength that may provide long-term support against current headwinds.
