- Ton’s liquidation amounts to $7.2 million following the arrest of Telegram’s founder.
- Fear, uncertainty and lack of confidence among investors have led to high selling pressure.
The Toncoin [TON] The community has experienced extreme pressure due to the arrest of Telegram founder Pavel Durov. According to the report, Durov was arrested in France and likely faces up to 20 years in prison. This news has had a huge impact on the Telegram-based altcoin.
Ton liquidation spikes
According to Coinglass data, Toncoin’s liquidation has reached an all-time high. Ton has reported $7.21 million in liquidated position. This exceeds the liquidation reported during the market crash earlier this month.
Data shows that during the 24 hours of the August 5 market crash, Ton’s liquidation hit a record $6.5 million, mostly for long positions. The recent liquidations are different as they show an increase in liquidations for short and long positions.
Source: Coinglass
In particular, such a liquidation shows that the market is experiencing high volatility and rapid price fluctuations. Typically, high volatility results in loss stops and margin calls, leading to forced liquidations.
Impact on ton price charts
Since the news surrounding the Telegram founder’s legal issues, Toncoin has lost $2.9 billion in market cap, from $17.1 billion to $14.2 billion. The decline was due to low trading volume, following a 27.3% decline.
Therefore, AMBCrypto’s analysis shows that increased liquidation has resulted in a downward trajectory for Ton. Toncoin has fallen drastically by 18.77% on the weekly charts.
This phenomenon is further evidenced by the declining Relative Strength Index (RSI), which has fallen from 52 to 36 at the time of writing.
Source: Tradingview
A falling RSI shows that the altcoin is experiencing massive selling pressure, pushing the crypto into oversold territory. This indicates increased uncertainty and a lack of investor confidence in the altcoin’s prospects.
The Directional Movement Index (DMI) has also fallen from 23 to 16 at the time of writing. This shows that the increased sell-off has pushed the altcoins into a downward trend.
The positive index crosses the negative from above, indicating that Ton’s downward movement has been strong over the past day.
Source: Santiment
Looking further, the increased inflow of foreign exchange indicates that tonnage holders expect prices to fall and are thus preparing for sales. So, due to the negative news, investors had to move their assets to stock exchanges to sell.
So, the data shows that negative news has affected market sentiment. High liquidations resulted in higher selling pressure, which resulted in a decline in market capitalization, trading volume and prices.
Therefore, if current market sentiment increases further, the altcoin risks falling further towards the local support level of $4.77.
