The price of Toncoin (TON) has plummeted following the arrest of Telegram CEO Pavel Durov on August 24. TON is currently trading at $5.38, down 9%.
Despite the sell-off and profit-taking, a key on-chain indicator has given a buy signal, indicating a possible rebound.
Toncoin Presents a Drop for Interested Traders
Toncoin (TON) MVRV ratios analyzed across different moving averages indicate that this could be a strategically advantageous time to buy the altcoin. Data from Santiment shows that the token’s 7-day and 30-day MVRV ratios are currently -5.71% and -9.10%, respectively.
The MVRV metric compares the current market price of an asset to the average price of its tokens in circulation. An MVRV ratio below zero indicates undervaluation, meaning the asset is trading below the average cost of acquiring its tokens in circulation.
Historically, a negative MVRV ratio signals a buying opportunity, allowing market participants to purchase assets at a lower price with the expectation of selling them later at a higher price.
In addition, the TON derivatives market is showing resilience despite recent challenges. The growth of open interest in futures and the positive funding rate on exchanges reflect the continued confidence among traders.
Currently, TON futures open interest is $345 million, up 46% since Durov’s arrest. Futures open interest measures the total number of outstanding contracts, and its increase indicates growing participation by traders opening new positions.
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Moreover, positive TON funding rates suggest an increase in demand for long positions. Despite the recent price drop, traders continue to favor buying the asset. The latest data shows a funding rate of 0.0074%, indicating that most traders expect prices to rise rather than fall.
TON Price Forecast: Spot Market Still Bearish
TON spot traders have become increasingly bearish following Durov’s arrest. The token’s technical indicators point to a surge in selling pressure overshadowing buying activity.
For example, the TON Directional Movement Index (DMI) shows a positive directional indicator (+DI) below a negative directional indicator (-DI), signaling a strong downtrend and increasing selling pressure.
Moreover, the token’s Relative Strength Index (RSI) highlights the bearish momentum. Following the arrest, TON’s RSI dropped from a neutral 50 to 36.98, approaching the oversold zone, indicating increased selling activity.
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If the selling pressure continues, TON price could fall to $4.73. Conversely, a bullish shift could push the price to $5.47.