Toncoin’s TON outperformed the CoinDesk 20 index following the protocol’s announcement that its blockchain had restarted.
While most of the market struggled, TON showed resilience as the blockchain came back online. Many major tokens, including AI-focused ones, saw declines after riding high on expectations of strong Nvidia earnings.
Toncoin (TON) managed to recover some of its earlier losses after its blockchain was restored following a nearly five-hour outage. The downtime, which was partly attributed to the popularity of the DOGS airdrop—a Ton Foundation initiative aimed at raising awareness about Pavel Durov’s controversial arrest—didn’t result in a “dog day afternoon” for the token. Throughout the East Asia trading session, TON trimmed its losses and is now down by less than 1%, according to CoinDesk Indices data. In contrast, the CoinDesk 20 (CD20) index, which tracks the largest and most liquid digital assets, has dropped over 6.5%. The broader crypto market was led lower by Bitcoin (BTC), with over $300 million in crypto futures liquidations, the highest since August 5.
Bitcoin (BTC) fell by 6%, while Ether (ETH), Solana’s SOL, Cardano’s ADA, and Dogecoin (DOGE) all dropped over 5%. XRP showed relative strength with a 3.4% decline, and Tron’s TRX was the best performer among major tokens with a 2% drop. Ether futures saw the highest liquidations at $102 million, followed by Bitcoin at $96 million and a mix of smaller altcoins at $40 million.
These sudden liquidations likely triggered a long squeeze, exacerbating market losses. A long squeeze occurs when traders betting on rising prices are forced to sell into a declining market to minimize losses, creating a cycle. CoinGlass data reveals that open interest in Bitcoin futures has dropped to $31 billion from $34 billion on Monday, indicating waning trader sentiment as asset prices fell. Open interest represents the number of unsettled futures contracts and shows whether new money is entering or leaving the market.
The sell-off coincided with significant outflows from U.S.-listed Bitcoin exchange-traded funds (ETFs), which saw over $127 million in net outflows on Tuesday, ending an eight-day streak of inflows. Ether ETFs experienced their ninth consecutive day of outflows, with over $3.45 million leaving the products.
“BTC ETFs saw substantial $127 million outflows as traders likely took profits after the Jackson Hole rally, while ETH continued its losing streak with the 9th day of outflows as the Ethereum mainnet faces an identity crisis,” said Augustine Fan, head of insights at on-chain financial products provider SOFA, in a Telegram message. “Short-dated volatility spiked as traders scrambled to buy downside protection (puts), with underlying momentum remaining weak due to supply overhang and a lack of near-term on-chain catalysts,” she added.
AI tokens also experienced declines, despite investor optimism surrounding Nvidia’s anticipated strong earnings. According to CoinDesk Indices data, NEAR dropped 10%, ICP fell 6.5%, FET lost 11.8%, Bittensor’s TAO declined 11.3%, and RENDER (RNDR) decreased by 9.5%.
“Sentiment around AI has clearly shifted, as reflected in the performance of AI tokens and NVIDIA. After a pullback and subsequent recovery, NVIDIA still holds significant influence, especially with its upcoming earnings report,” said Fairlead Strategies founder and Managing Partner Katie Stockton during a recent CoinDesk TV interview. “This could either drive the market higher ahead of a potential September correction or initiate that correction. We anticipate NVIDIA and the mega-cap stocks will enter a more range-bound environment amid increased volatility, regardless of AI exposure,” she continued.
In other news, Hong Kong-based custodian Hex Trust announced the launch of a staking partner program, providing clients with more access to staking options, signaling ongoing institutional interest in the asset class.
