Toncoin ($TON), the native cryptocurrency of The Open Network, has experienced significant volatility over the past year. From its peak of $8.24 in June 2024, Toncoin has plunged by 55%, with its price currently trading around $3.50. This sharp decline has raised concerns among investors, but despite the downturn, the cryptocurrency continues to receive strong backing from major venture capital (VC) firms. These firms hold over $400 million in Toncoin, signaling continued faith in the network’s long-term potential.

Toncoin’s Volatility and Technical Analysis

The recent price action of Toncoin suggests that it’s at a critical juncture. Trading volumes have surged by 18%, indicating a heightened level of market activity. Currently, Toncoin is testing key support levels between $3.50 and $4.00. These levels are seen as crucial for the token’s price trajectory moving forward. If Toncoin can hold above this zone, it may set the stage for a rebound toward higher levels.

An inverse Head and Shoulders (H&S) pattern is forming on the charts, which is often associated with bullish reversals. This pattern typically signals that the price could rise if it breaks above the neckline, which in this case is between the $4.00 and $4.50 range. A successful breakout above this resistance could pave the way for a potential recovery to $5.00 or even $5.50.

However, the downside risk remains significant. A drop below the critical support of $3.00 would reinforce the downtrend and negate the bullish signals. The Relative Strength Index (RSI) sits at 58.37, suggesting that the market is not yet overbought, but the price action remains sensitive to broader market dynamics.

Legal and Airdrop Issues Affecting Toncoin

Toncoin’s recent price movements cannot be explained by technical factors alone. Legal issues involving Pavel Durov, the creator of Telegram and a prominent figure behind the TON project, have weighed heavily on the market sentiment. In the second half of 2024, Durov’s legal troubles caused uncertainty among investors. However, Durov’s return to Dubai on March 17, 2025, led to a 20% surge in Toncoin’s price, signaling that market participants are still optimistic about the project.

Despite this, Toncoin has faced criticism for recent airdrop controversies. The Hamster Kombat and NotPixel airdrops, which utilized the TON blockchain, raised concerns about transparency and fairness in the reward distribution process. These events added to the cloud of uncertainty surrounding Toncoin, but the network has continued to perform well in terms of user activity and developer interest, suggesting that the core ecosystem remains strong.

Institutional Support and Long-Term Confidence

Despite these challenges, Toncoin has seen increasing institutional backing, reinforcing its long-term prospects. In December 2024, OKX Ventures invested $5 million into TON Ventures, a fund designed to support the development of Telegram-native applications on the blockchain. This investment is focused on attracting experienced developers and fostering the growth of decentralized applications (dApps) on the TON network.

Moreover, major VC firms such as Sequoia, Ribbit, Benchmark, and SkyBridge have invested in Toncoin, with total institutional holdings exceeding $400 million. This strong financial backing suggests that many investors still believe in the network’s potential, despite short-term hurdles. As more decentralized applications are built on the TON blockchain, its user base is expected to grow, further increasing the cryptocurrency’s appeal.

The Future of Toncoin

Toncoin’s journey began in 2018 when the creators of Telegram first conceptualized it. After facing regulatory hurdles, the network’s mainnet went live in May 2021, and since then, it has evolved into a decentralized Layer-1 blockchain hosting various applications, including decentralized exchanges, games, and Telegram-integrated mini-apps. The close integration with Telegram has helped Toncoin carve a niche in a competitive blockchain market.

Despite its recent struggles, Toncoin’s ecosystem continues to grow, with increasing developer activity and rising user numbers. The challenge for Toncoin moving forward will be to maintain its technical momentum while navigating the broader regulatory environment, which could influence the network’s future growth and stability.

In conclusion, while Toncoin’s price has experienced a significant decline, the support from venture capital firms and the potential for a technical recovery suggest that the cryptocurrency still has a promising future ahead. Investors will need to closely monitor key support levels and the broader market dynamics to gauge the next steps for Toncoin.