The arrest of Telegram founder Pavel Durov over the weekend by French authorities has triggered increased on-chain activity for the Toncoin (TON) network, raising concerns about potential fallout. Toncoin's price has continued to decline, reflecting bearish market sentiment. Ending last week at around $5.80, TON saw an over 18% drop, indicating that bearish forces are dominating. The Relative Strength Index (RSI) for TON against the US dollar also fell below 50% on the weekly chart for the first time since February, signaling a weakening market trend.

Investor responses have been mixed amid this turmoil. Some investors have shown support for Durov by buying into TON and related projects, while others are exiting their positions. On-chain data from Lookonchain revealed that a liquidity provider sold over 356,000 TON tokens, worth nearly $2 million. Despite this significant sale, it's unclear if a broader sell-off is occurring, as TON still holds over $3.4 million in liquidity across decentralized exchanges like Uniswap (UNI). Competing networks, such as Tron (TRX), have outperformed Toncoin recently, but the TON network remains a significant player in the Web3 space, with $619 million in stablecoins circulating and over $388 million in total value locked. Additionally, the rise of meme coins like Notcoin (NOT) and DOGs has injected new energy into the Toncoin ecosystem, keeping it competitive in the evolving crypto market.