Will TONCOIN linked to Telegram recover after Pavel Durov’s arrest?

Toncoin (TON) has been in freefall over the past 24 hours, with the price plunging as panic selling surged following the arrest of Telegram CEO Pavel Durov by French authorities.

TON’s price fell 25% to $5.24 on August 25, a day after news of Durov’s detention broke. Durov is accused of violating data privacy and cryptocurrency regulations.

Telegram has played a key role in promoting and integrating Toncoin within the ecosystem, and Durov has become a central figure in the coin’s narrative and future development. As a result, some Toncoin traders have sold their holdings in a panic.

However, considering several technical and market factors, it is possible that TON could see a significant rebound in the coming weeks.

TON is also likely to follow BNB’s sharp rebound

TON’s current price drop appears to be similar to the price drop of BNB (BNB) a few days before the sentencing of former Binance CEO Changpeng Zhao.

BNB fell 13.50% ahead of Binance CEO Changpeng Zhao’s (CZ) sentencing in the US on April 30. However, after the legal dust settled, the cryptocurrency made a strong recovery, rising about 35% from its lows to nearly $700 on June 6.

When news of legal troubles involving key figures like CZ and Durov breaks, panic selling is triggered as investors rush to protect their investments from potential repercussions.

But once the initial shock subsides, markets reassess the situation more rationally.

In the case of BNB, after CZ’s sentencing died down, traders realized that while the legal issues were serious, they did not pose an existential threat to Binance, the company, or its ecosystem.

This caused a psychological shift from fear to optimism, with the BNB price rising by 35% as traders who had panicked and sold re-entered the market.

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The same psychological pattern could be seen in Toncoin. Initially, Durov’s arrest could be seen as a major red flag, leading to a sharp decline as traders close out positions.

However, if the market later perceives this arrest as an isolated incident that did not fundamentally damage the TONCOIN ecosystem, investors may begin to view this crash as an opportunity to buy the panic.

TON bounces off ascending channel support.

From a technical perspective, TON is trading within a clearly defined ascending channel range as seen on the daily chart.

The TON/USDT pair bounced off the lower trendline of this channel, which has served as a strong support line since it was formed earlier this year.

Additionally, TON’s daily Relative Strength Index (RSI) reading was 37.54 on August 25, approaching the sell-off threshold of 30, which usually leads to consolidation or a rebound.

The upper trendline of the ascending channel is currently near $8.50. A move to this level would indicate a 50% upside, consistent with the bullish momentum suggested by the RSI.

Rising OI and funding ratios indicate market confidence.

Toncoin futures market data also shows growing confidence among traders. After Durov’s arrest, TON’s open interest (OI) rose to $303.62 million, the highest since July. Meanwhile, the 8-hour funding rate rose to 0.0101%, the highest in three months.

A rising OI is a signal that more funds are flowing into the TON futures market, increasing interest and speculation about the price direction. A positive funding ratio indicates that traders are increasingly willing to pay a premium to maintain a long position in TON.

In addition, the rising funding rate indicates that traders are betting on a price rally, which further increases the possibility of a sharp upward move. If this trend continues, it could lead to a sharp price rally, potentially taking TON above the $8.50 target.

This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.