TON Blockchain Recovers, But Price Plummets Amidst Musk-Telegram Dispute
The TON blockchain network has successfully recovered from a brief outage that halted block production, though its native token, Toncoin, continues to experience a sell-off. This downturn is largely attributed to ongoing market reactions following a dispute involving Elon Musk regarding a rumored partnership between Telegram and xAI, despite Telegram's CEO asserting the deal is agreed in principle.
TON Network Recovers From Brief Outage
The Open Network (TON), a layer-1 blockchain closely linked with Telegram, experienced a short but impactful outage on June 1. Block production ceased for approximately 40 minutes before the network was fully restored. TON's development team swiftly identified and resolved the issue, attributing it to an error in processing the masterchain dispatch queue. Crucially, the team confirmed that no funds were compromised, and all transactions submitted during the downtime remained secure.
This incident highlights a growing trend in the blockchain space: brief outages may become more common as networks become more sophisticated and handle higher throughput. While such events can impact consumer confidence, TON has a history of resilience, having overcome similar challenges in 2024 due to high demand from memecoin minting.
Toncoin Sell-Off Continues Amidst Partnership Dispute
Despite the network's recovery, Toncoin (TON) has seen a significant price drop, falling over 7% from $3.319 to just under $3. This decline is a continuation of a sell-off triggered by market uncertainty surrounding a potential collaboration between Telegram and Elon Musk's artificial intelligence company, xAI.
- The speculation initially drove TON's price to a high of $3.65.
- Musk's subsequent denial of a signed deal caused the price to tumble, with TON now down 17% since the peak.
- Telegram CEO Pavel Durov has maintained that the deal is "agreed in principle," with only "formalities pending."
This dispute has led markets to price in the potential collapse of what could have been a major integration, nearly erasing all previous gains. However, TON's underlying fundamentals remain strong, with Telegram continuing to advance TON-based in-app payments, offering a unique pathway to mainstream user adoption.
Market Outlook and Technical Analysis
Key price levels for Toncoin are now between $3.00 and $3.22. A break above or below this range could dictate the next market movement. On-chain data indicates significant wallet concentration around $3.24, where nearly 740 million tokens are held across 1.21 million addresses.
The recent sell-off saw a surge in trading volume, with over 10.6 million in a single hour. Buyers stepped in at the $3.00 mark, leading to a V-shaped recovery to $3.086. TON perpetual futures open interest has also risen by 33% to $190 million, suggesting traders are anticipating continued volatility.
Telegram recently raised $1.7 billion through convertible bonds, with plans to use $955 million to buy back existing bonds and the remaining $745 million to fuel growth, further solidifying the ecosystem around TON.