- TON liquidation reaches $7.2 million after Telegram founder’s arrest
- Investor fear, uncertainty and lack of confidence have led to increased selling pressure.
The Toncoin (TON) community has been under intense pressure due to the arrest of Telegram founder Pavel Durov. According to reports, Durov was arrested in France and is likely to face a 20-year prison sentence. This news has had a huge impact on Telegram-based altcoins.
Tone liquidation surge
According to Coinglass data, Toncoin liquidations hit a historic high in liquidations. Ton reported $7.21 million in liquidated positions, surpassing the liquidations reported during the market crash earlier this month.
According to data, during the 24 hours leading up to the market crash on August 5, TON liquidations hit a record $6.5 million, mostly long positions. The recent liquidations are different, as liquidations of both short and long positions have increased.
Source: Coinglass
In particular, these liquidations show that the market is experiencing high volatility and rapid price movements. High volatility often leads to stop losses and margin calls, which in turn lead to forced liquidations.
Impact on the ton price chart
Following news surrounding the legal issues of Telegram’s founder, Toncoin lost $2.9 billion in market cap, dropping from $17.1 billion to $14.2 billion. The decline was due to lower trading volume after a 27.3% drop.
Therefore, according to AMBCrypto’s analysis, the increase in liquidations has led to the Ton’s downward trajectory. Toncoin has plunged by 18.77% on the weekly chart.
This phenomenon is further evidenced by the decline in the Relative Strength Index (RSI), which fell from 52 to 36 at the time of writing.
Source: Tradingview
A decreasing RSI indicates that this altcoin is under immense selling pressure, which is pushing the cryptocurrency into oversold territory. This suggests that uncertainty is increasing and investors are less confident about the prospects of this altcoin.
Likewise, the Directional Movement Index (DMI) has fallen from 23 to 16 as of this writing, showing that altcoins have been pushed into a downtrend due to increased selling.
The positive index crossing the negative index from above suggests that the downtrend in tone has been strong over the past day.
Source: Santiment
Looking further, the increased inflow from exchanges indicates that TON holders are expecting the price to fall and are preparing to sell. Therefore, due to the negative news, investors were forced to move their assets to the exchange and sell.
So, as the data shows, negative news has affected market sentiment. High liquidations have led to higher selling pressure, which has led to lower market cap, volume, and price.
Therefore, if the current market sentiment holds, the altcoin is at risk of further decline towards the local support level of $4.77.