If there is one thing that can be said without fear of being wrong, it is that the last few weeks have not been positive for Toncoin. Since the arrest of Telegram CEO Pavel Durov, uncertainty has taken hold of The Open Network’s (TON) native currency. Its price has started a sharp decline from almost $7 per unit.
Although there was some optimism about a recovery in the early days, the situation is getting worse for investors in this currency.
The mistakes that increased uncertainty in TON
Initially, it was thought that, since TON is a decentralized network, Durov’s arrest would not have a strong impact on it. However, that was the first mistake of some investors who took advantage of this initial setback.
Later, it was thought that the release of the Russian businessman would put an end to the bad times and the currency would return to its previous state. This was the second mistake. There was a third mistake, and that was to assume that announcements of the launch of star tokens such as Hamster Kombat would stimulate demand for Toncoin again.
But an investigation by South Korean authorities against Telegram exacerbated the problem. As reported by this media, the messaging app is the main means of disseminating deepfake sexual content in the Asian country. In this sense, the Seoul authorities put the spotlight on the firm and increased the problems.
This action became a momentous issue. Thus, the loss of the key support of $5 would mean a much sharper crash. The inclusion of Toncoin among Binance‘s simple-earn options increased optimism and briefly stimulated the adoption of the coin. However, Tuesday’s crash buried hopes of maintaining that key support.
Could Toncoin Price Hit a Bigger Bottom?
The US manufacturing PMI report sent markets into a tizzy on Tuesday. Equity investors assumed that factory activity below 50 was a clear sign of recession in the world’s largest economy.
This has become a devastating blow to the hopes of Toncoin investors. Uncertainty about where TON will bottom out is currently rife as the price continues to decline. Numerous factors need to be taken into consideration to get a rough idea of what will happen to the token in the near future.
For example, the US payrolls data, due out next Friday, will be heavily weighted. However, even if it were remarkably positive, it would not translate into the end of TON’s problems. Telegram remains under investigation and other governments are likely to join in the pressure against Durov’s app.
If this is the case, the TON coin could enter a similar phase to that experienced by Worldcoin’s WLD. The latter is going through an ordeal due to the inexhaustible pressure from regulators around the world. Although these are different contexts, a negative scenario should not be ruled out, at least in theory.
At the time of writing, the token is priced at $4.61, according to CoinMarketCap. In the last 24 hours, its performance is -10.8% and in a week it has lost more than 16.5%.
TON price loses key support at $5 and investors face a crash of uncertain dimensions. Source: CoinMarketCap
Developments do not stop
But the problems are by no means an obstacle to the continued strong development of the TON network. Mini-applications of the so-called tap-to-earn games continue to engage hundreds of millions of users. At the same time, the participation of capital in the network protocols remains robust.
Over the past year, this ecosystem has grown to $319 million in total value locked (TVL), according to data from DeFiLlama. Meanwhile, the market capitalization of stablecoins exceeds $619 million. These are enviable numbers for any project that is taking its first steps.
TON Accelerator announced the launch of the TON:Acc program to incubate startups seeking to develop on The Open Network. In a few months, TON:Acc will select five projects that will receive up to $2.5 million for their developments on TON. The latter will be done through Telegram mini-applications.
As you can see, the network is robust and you could say that it is just a matter of time before the token recovers. As already mentioned, everything will depend on what happens with Telegram.
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