The recent arrest of Telegram CEO Pavel Durov by French authorities on charges related to data security and crypto regulation violations has caused a significant impact on the cryptocurrency market, particularly affecting Toncoin (TON).
On August 25, just a day after the news broke, TON’s price plummeted by 22%, dropping to $5.32. This sudden decrease has raised concerns among investors, but some analysts believe that this could be a short-term issue rather than a long-term problem.
Immediate Impact
Telegram has been closely associated with Toncoin, deeply integrating it within its ecosystem. This close relationship means that any news involving Durov or Telegram can significantly affect TON’s value.
The recent news triggered panic selling as traders sought to protect their portfolios from further losses. However, this rapid sell-off might not be as severe as it initially appears.
Historical Comparisons
To better understand TON’s potential recovery, it’s useful to compare the situation with a similar event involving Binance’s BNB token.
On April 30, 2024, Binance CEO Changpeng Zhao (CZ) faced legal challenges in the United States, resulting in a 12% drop in BNB’s price. However, this decline was short-lived. By June 6, 2024, BNB had strongly rebounded, increasing by 34% from its low point and reaching $724.
The similarities between BNB’s situation and TON’s current predicament are striking. Both tokens experienced a sharp decline following negative news about their CEOs, leading to panic selling. But as the market absorbed the news and realized that it didn’t fundamentally alter the operations or potential of the underlying projects, sentiment shifted from fear to optimism, driving a strong recovery.
Technical Analysis Points to Recovery
From a technical standpoint, there are several signs that TON could follow a similar recovery path. Despite the recent drop, TON has been trading within an upward price channel since the beginning of 2024. The panic selling only tested the lower edge of this channel, suggesting that the long-term uptrend remains intact.
Moreover, TON’s Relative Strength Index (RSI) fell to 37.54 on August 25, 2024, approaching the oversold territory (typically considered to be below 30). This suggests that the selling pressure may have been overdone, and a rebound could be on the horizon as the RSI recovers.
Another encouraging sign is the rise in Open Interest for TON, which reached $303 million—the highest level since July 2024. Open Interest represents the total number of outstanding derivative contracts, and an increase typically indicates that more traders are taking positions, often in anticipation of a price movement. The fact that the funding rate remains positive suggests that many of these traders are betting on a price increase.
Market Sentiment and the Path Forward
The key factor to watch in the coming weeks will be market sentiment. As we saw with BNB, the initial reaction to legal troubles can be intense, but it often subsides as traders reassess the situation. If TON’s fundamentals remain strong and Telegram continues to operate without significant disruption, the current dip could present a buying opportunity for those looking to “buy the bottom.”
Should the market sentiment shift from fear to optimism, and if technical indicators continue to point towards a recovery, TON could be poised to climb back towards $8.5 soon.
Conclusion
While the arrest of Telegram CEO Pavel Durov has undoubtedly shaken the market, history suggests that Toncoin could recover from this setback. The comparison with Binance’s BNB token provides a hopeful precedent, and technical indicators are beginning to suggest that the worst may be over. For traders and investors willing to weather the storm, TON might soon offer a compelling opportunity for growth.
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