Toncoin started August 24 a little bullish as it edged closer to $7 but halted its ascent at $6.88. A small downtrend soon followed as the 2-hour chart suggests that it held prices close to high for a bit after losing momentum.
The chart also indicates that the price took a strong plunge starting at 20:00 UTC. The first 2-hour candle printed a 12% drop, while the next carried an over 4% drop. TON is down by over 15% on the 1-day scale.
The dip was sudden and caught many unaware. What caused the decline?
Pavel Durov Arrest
French special services detained Telegram founder Pavel Durov at an airport in France. He faces accusations of complicity in terrorism, drug trafficking, fraud, and money laundering.
Authorities are reportedly using Durov’s arrest to pressure European countries into strengthening collective efforts to curb the use of encrypted messaging services in connection with terrorism, according to TF1.
“Telegram is a hub for criminal activity. While the platform is currently under scrutiny for illegal streaming of sports events, it is also used by organized crime. In addition to terrorism, the most dangerous criminals use Telegram to exchange child pornography,” stated one of the investigators.
The arrest and the charges leveled against Durov took the internet by storm, as there were no telling signs. Nonetheless, the future is unclear, as many analysts say there is compelling evidence against the defendant.
Telegram will continue to function as it does, as the CEO enacted a plan in case of his arrest. It may result in quick recovery from the event’s effect
How Low Will Toncoin Go?
With the fundamentals in view, TON will gradually halt the decrease as the effect wears out. It may mean that the stops its decline within the next three days. Nonetheless, with the ongoing case, there are unforeseen events that would spring up.
The cryptocurrency tested a key support but rebounded. It saw a small recovery after testing $5.50. It is worth noting that the mark served as critical support more than once, halting downtrends due to the massive demand concentration.
While the current low seems likely the lowest it’ll attain, there’s a chance it slips further. Based on previous price actions, the altcoin may retrace as low as $4.70 when the highlighted critical mark flips.
Indicators are Bearish
Another factor to consider when gauging how low the asset will go is the indicators. However, these metrics have flipped bearish.
One such is the moving average convergence divergence. The 12-day EMA is on the decline in response to the massive price drop. It intercepted the 26-day EMA as a result and is continuing the trend. With the ongoing negative divergence, prices may continue the downhill movement.
The relative strength index is also negatively responding to the ongoing trend. The metric shows investors reducing trust in the asset since the arrest of the telegram boss. It is at its lowest in the last fourteen days, having dropped from 52 to 37.
The pivot point standard highlights several marks to watch. Toncoin dropped below the first pivot support. The downward movement points to an impending attempt at the second pivot support at $5.33. PPS indicates that the coin may not rebound after flipping S2 until it slips below $5.
Nonetheless, TON is trading close to the 38% Fibonacci retracement level. The bulls must maintain this level as this metric also points to a slip below $5 before a rebound.
