The recent arrest of Telegram’s founder, Pavel Durov, has triggered a steady decline in the value of Toncoin (TON). Despite this challenging situation, some traders see this as an opportunity to purchase the token at a reduced price.
Let’s explore how Durov’s arrest has affected TonCoin and whether now is a prudent time to invest in TON.
Investment Opportunity for Toncoin Buyers
Analyzing Toncoin’s Market Value to Realized Value (MVRV) ratio indicates that this might be a favorable moment to acquire the cryptocurrency.
According to Santiment, the 7-day and 30-day MVRV ratios stand at -5.71% and -9.10%, respectively.
Negative MVRV values suggest that the cryptocurrency is currently undervalued, which traders often interpret as a signal to buy assets at lower prices and sell them later at higher rates.
Meanwhile, the TON derivatives market remains strong. The increase in open interest (OI) in cryptocurrency futures and positive funding rates on exchanges show that trader confidence is still robust.
Currently, the OI for Toncoin futures amounts to $345 million, reflecting a 46% increase since Pavel Durov’s arrest. Furthermore, the funding rate is 0.0074%. Rates above zero typically indicate that traders expect the cryptocurrency’s price to rise soon.
TON Forecast: Bearish Trends Prevail
At the moment, TON is trading at $5.42, marking a 2% drop over the day. Over the past week, the token has lost more than 20% of its value.
The news of Pavel Durov’s arrest has significantly impacted the altcoin. Following the unexpected development, sentiment among Toncoin spot traders turned bearish. Technical indicators also suggest that sellers have taken the upper hand over buyers.
For instance, the Directional Movement Index (DMI) shows the +DI indicator has fallen below the -DI indicator, signaling a strong downtrend and selling pressure on the asset.
The Relative Strength Index (RSI) for the token also paints a bearish picture. Since Durov’s arrest, the RSI has dropped from a neutral 50 to 36.98, approaching the oversold zone. This indicates heightened selling activity.
If the selling pressure continues, Toncoin’s value may drop to $4.73. Conversely, if buyers intervene, the price of TON could rise to $5.47.
By understanding these market dynamics, traders can make more informed decisions about whether to invest in Toncoin during this volatile period.
My name is Jay Skrantz, and I’ve been a freelance writer for 10 years, concentrating largely on investment brokerage, mutual fund investing, and financial analysis topics. As a reporter, I’ve written extensively for a wide variety of sites and publications like SeekingAlpha, MoneyShow, and MotleyFool. I’ve also done substantial freelance work for a number of financial publications, including MarketWatch, CIO Magazine, and TheStreet.
