The Downfall of Toncoin (TON): What Went Wrong and What’s Next

Toncoin (TON) started the year on a high note, experiencing a significant bull run that led to its price reaching a new all-time high of nearly $8.20 in mid-June. However, the party didn’t last long as the asset began losing momentum towards the end of August. Currently, TON is trading at around $4.80, marking a drastic 40% drop from its peak earlier in the summer.

The decline in TON’s price can be attributed to the arrest of Pavel Durov, the founder and CEO of Telegram. Durov was detained in France following accusations that the messaging app was being used for illicit activities such as drug trafficking, fraud, and child sexual abuse. This development had a ripple effect on Toncoin as it is closely associated with Telegram, being the native cryptocurrency of The Open Network – a blockchain originally developed by the messaging application.

The negative news surrounding TON has had a significant impact on investor sentiment. According to IntoTheBlock data, nearly 80% of TON holders are currently facing losses, with only 9.3% in the green. This puts TON in a tough spot, with a higher ratio of investors underwater compared to other cryptocurrencies in the top 15 club. For instance, Cardano (ADA) has almost 85% of its holders in the red at the moment.

One key on-chain metric that is signalling further trouble for TON is the Large Transactions indicator, which is down 0.46% daily. This indicator reflects the change in the number of transactions that are greater than $100,000. Additionally, crypto analyst Ali Martinez has warned that TON needs to reclaim the $4.70 support level soon to prevent a crash to as low as $2.60. The asset briefly surpassed the $4.70 mark on September 6, indicating a crucial point for its price trajectory.

Toncoin’s sharp drop and negative news have significantly impacted investor sentiment and put the asset in a precarious position. As on-chain metrics suggest further downside potential, it remains to be seen whether TON can bounce back from its current woes or if it will continue on a downward spiral.