- Ton liquidation hits $7.2 million following Telegram founder arrest.
- Investors fear, uncertainty and lack of confidence have resulted to high selling pressure.
The Toncoin [TON] community has experienced extreme pressure over the arrest of Telegram founder Pavel Durov. According to the report, Durov was arrested in France and is likely to face a 20-year jail term. This news have had massive impact on the Telegram-based altcoin.
Ton liquidation spikes
According to Coinglass data, Toncoin liquidation has hit a historic high in liquidation. Ton has reported $7.21 million in liquidated position. This surpasses liquidation reported during the market crash earlier this month.
Data shows during the 24 hours of the 5th August market crash, Ton liquidation hit a record $6.5 million which was mostly for long positions. The recent liquidations are different as they show increased liquidation for short and long positions.
Source: Coinglass
Notably, such liquidation shows that the market is experiencing high volatility and rapid price swings. Mostly, high volatility results in stopping losses and margin calls leading to forced liquidations.
Impacts on Ton price charts
Since the news surrounding the legal issues of the Telegram founder, Toncoin has lost $2.9 billion in market cap from $17.1 billion to $14.2 billion. The decline resulted from low trading volume after declining by 27.3%.
Therefore, AMBCrypto’s analysis shows, that increased liquidation has resulted in a downward trajectory for Ton. Toncoin has declined drastically by 18.77% on weekly charts.
This phenomenon is further proved by the declining Relative Strength Index (RSI) which has fallen from 52 to 36 at press time.
Source: Tradingview
A declining RSI shows the altcoin is experiencing massive selling pressure which is pushing the crypto towards oversold territory. This suggests increased uncertainty and a lack of investors’ confidence in the altcoin’s prospects.
Equally, the Directional Movement Index (DMI) has declined from 23 to 16 as of this writing. This shows that increased sell-offs have pushed the altcoins to a downward trend.
The positive index cross the negative from above suggests Ton’s downward movement has been strong over the past day.
Source: Santiment
Looking further, the increased exchange inflow indicates Ton holders expect prices to decline thus preparing to sell. Thus because of negative news investors had to move their assets to exchanges to sell.
Therefore, as data shows, negative news has impacted market sentiment. High liquidation resulted in higher selling pressure thus resulting in declined market cap, trading volume, and prices.
Therefore, if the current market sentiment, the altcoin risks further decline to the local support level of $4.77.
