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The impact of the Telegram founder’s legal problems

Following the controversial arrest of Telegram founder Pavel Durov by French authorities at Le Bourget airport over the weekend, on-chain activity exploded on the Toncoin (TON) network, a fast-growing Layer 1 chain. Due to fears over the potential impact of Durov's arrest, the TON price has accelerated its downtrend recently.

TON price movement turns bearish

The large-cap altcoin, with a fully diluted valuation of around $28 billion and an average daily trading volume of around $1.3 billion, closed last week at around $5.8, down over 18 percent.

Therefore, it can be assumed that the TON bears are in control and the downward pressure will continue.

Additionally, the Relative Strength Index (RSI) of TON price against the US dollar on the weekly time frame fell below the 50 percent mark for the first time since February.

Is the Toncoin network likely to face a liquidity crisis?

While some investors have expressed their support for Durov by investing directly in TON and its projects, on-chain data shows that one liquidity provider has decided to exit the market.

More specifically, Lookonchain identified a liquidity provider who sold more than 356,000 TON worth nearly $2 million earlier today.

However, the decision of a single liquidity provider cannot be generalized to other companies unless a pattern emerges. In addition, TON has more than $3.4 million in liquidity on various DEX exchanges, led by Uniswap (UNI).

Market picture

The Toncoin network was previously surpassed by Tron (TRX) as the TON price dropped to $5.5 on Monday. Nevertheless, the Toncoin network remains a major Web3 ecosystem with over $619 million in stablecoins and a total value locked of over $388 million.

The launch of successful meme coins – led by Notcoin (NOT) and DOGs – has contributed significantly to keeping the Toncoin network relevant and competitive in the industry.

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