Toncoin (TON) Shows Signs of Recovery After Dropping 67% in Q1

Toncoin (TON), the native token of The Open Network (TON), linked to the popular messaging platform Telegram, is showing signs of a recovery after a difficult Q1.

Toncoin (TON), the native token of The Open Network (TON), linked to the popular messaging platform Telegram, is showing signs of a recovery after a difficult Q1.

The token saw a massive drop of 67% after peaking above $7 last December, later plunging to hit a low of $2.3 in mid-March. From that trough, the altcoin has staged a significant rebound, bouncing back by 72%, offering some relief to holders who were previously underwater.

What Drove Toncoin’s Recovery?

The broader cryptocurrency market saw an upswing in March, with several altcoins benefitting from Bitcoin’s rally as it rose from the $78k level to $88k. This move helped push Toncoin’s price back up by 60%.

However, the token’s recovery didn’t stop there; it extended further due to two key developments: Grok AI’s integration and a substantial backing boost from Silicon Valley venture capitalists.

Earlier this year, DeepMind’s flagship AI model, known as Grok, was integrated into the Open Network (TON). This addition made TON the third blockchain to host a large language model (LLM), following in the footsteps of Ethereum (ETH) and Solana (SOL).

Moreover, Pavel Durov, the founder of Telegram, confirmed that the TON blockchain had secured a significant $400 million investment from top tech investors. This influx of capital strengthened confidence in the project, which, in turn, raised renewed accumulation of TON tokens.

On-chain data supports this narrative: over 1.1 million TON tokens were withdrawn from exchanges, signaling an increasing belief in the project’s future.

However, despite these positive developments, Toncoin experienced a slight retracement after Bitcoin dipped following a hotter-than-expected U.S. inflation print. In the past 48 hours, the token dropped almost 10%, falling from $4 to $3.6.

Nevertheless, the altcoin’s overall price performance remains above its February range of $3.5–$4, offering hope to traders that the recovery is still intact.

Current Technical Levels to Watch

Now, the token is in its February price range, which could indicate consolidation. A critical level to watch is $3.5, which has historically acted as both support and resistance.

If the token maintains its position above this level, it could continue its gradual ascent, with the next major target being $5, which also corresponds with the 200-day moving average (200DMA). Reclaiming the 200DMA would signify that Toncoin is in a strong uptrend and could attract further bullish momentum.

However, there is a risk of a renewed sell-off in the second quarter if broader market sentiment turns negative. Should this occur, Toncoin could fall below $3.5, with immediate support at $3.0 or even $2.5.

Investors should keep a close eye on these levels, as they will provide key insights into the token’s short-term trajectory.

What’s Driving Investor Sentiment?

While the technical chart looks promising, Toncoin’s recovery still depends on broader market factors. A critical factor that could influence TON’s price is Bitcoin’s next move.

As the largest cryptocurrency by market cap, Bitcoin’s performance often dictates the direction of the entire market, including altcoins like Toncoin. If Bitcoin continues its upward momentum, it could drive additional confidence into altcoins, allowing TON to extend its recovery.

However, macroeconomic conditions are a key risk factor. Uncertainty surrounding inflation, monetary policy, and global economic stability could dampen investor enthusiasm.

As such, traders and investors should closely monitor both Bitcoin’s price movements and any significant macroeconomic updates that could impact market sentiment.