Recent Events Impacting Toncoin

Toncoin has been grappling with a difficult week, primarily due to two major events. Firstly, Pavel Durov, the founder of Telegram—an integral part of the Toncoin network—was arrested in France and is facing a potential 10-year prison sentence. This high-profile legal issue has cast a shadow over Toncoin, leading to a significant decline in market confidence.

Secondly, the Toncoin network experienced an extended downtime of over seven hours. Such interruptions can erode user trust and further exacerbate negative sentiment around the token. While the network has since been restored, the damage to confidence may have long-lasting effects.

Analyzing Toncoin’s Price Range

In recent months, Toncoin has exhibited a clear range-bound pattern. During June and July, the price established a range with lows around $6.94. However, selling pressure in late July caused a sharp drop to $4.75, turning the $6.94 level into a strong resistance point.

The price action over the past month reinforces this range-bound behavior. The mid-range level has consistently acted as resistance, and with recent movements, the price appears to be heading towards the $5.13 local lows. This pattern suggests that Toncoin might continue to struggle near these levels.

Technical Indicators Suggest Bearish Momentum

Technical indicators currently reflect a bearish outlook for Toncoin. The Relative Strength Index (RSI) is showing signs of bearish momentum, indicating that the selling pressure is dominant. Additionally, the On-Balance Volume (OBV) confirms rising selling activity, suggesting that a short-term recovery might be unlikely.

Given these indicators, the probability of Toncoin rebounding in the near term seems low. Instead, a further decline towards the $5 level appears more probable.

Evaluating Short-Term Trading Strategies

For traders considering whether to short Toncoin, the current market conditions offer some insights. According to recent data from AMBCrypto, the cumulative liquidation levels delta is negative, though not excessively so. This indicates that short positions currently outnumber long positions.

While a short squeeze—a situation where the price suddenly rises, forcing short sellers to cover their positions—could occur, it seems unlikely in the next 24 to 48 hours. Traders should be cautious of potential minor price bounces that might temporarily mislead.

Key Support and Resistance Levels

On the daily chart, the $5.13 level is identified as a significant support zone. However, liquidity pools around the $4.92-$5 range could exert downward pressure. This zone is densely populated with long liquidations, meaning that a move through this area might trigger further declines.

If the price sweeps below this support level, it could potentially pave the way for a recovery. However, in the immediate term, traders should be wary of minor price movements that could trap liquidity and create false signals.

Conclusion

Toncoin’s current bearish trend is influenced by a combination of recent negative events and technical factors. The significant drop in price, coupled with ongoing selling pressure and technical indicators, suggests that Toncoin may remain under pressure in the short term. Traders should closely monitor key support levels and be prepared for potential volatility.

In summary, while Toncoin faces challenges and a bearish outlook, keeping an eye on key levels and market dynamics will be crucial for making informed trading decisions. The token’s ability to hold above critical support levels or bounce back from oversold conditions will determine its short-term trajectory.