Tron Falls Sharply As Sun Scrambles To Save Stablecoin
16 June 2022 - 6:29AM
NEWSBTC
Tron price momentum faded over the weekend, and the price has
dropped by more than 40% since then. The cryptocurrency is
presently having difficulty gaining traction. Tron Falls AS
USDD Depegs TRX has dropped 19% and is now trading at $0.05,
its lowest level in 15 months. In the last 24 hours, the token has
also been the worst performer among the top 50 cryptocurrencies.
The token’s weakness follows the loss of the USDD algorithmic
stablecoin’s dollar peg, despite founder Justin Sun’s repeated
efforts to keep the peg. In the last 24 hours, the token’s entire
market valuation has dropped by nearly 1% to $701.4 million. The
token has garnered comparisons to Terra’s UST stablecoin, which
vanished in May due to its algorithmic nature. USDD/USDT breaks
dollar peg. Source: TradingView Fear began as soon as the USDD’s
1:1 peg to the dollar was lost. TRX hasn’t been able to reverse the
downward trend since then, plummeting by more than 40% in less than
a week. TRX may face tremendous sell pressure to close the gap as
long as USDD is below one dollar. TRX has found support at the
$0.05 level, from which it has bounced higher. TRX’s resistance is
at $0.057, and given the current fundamentals, it doesn’t appear
likely that the trend will shift. Related reading | TRON Has a
Record-Setting Month Justin Sun Scrambles To Save USDD However,
Tron, like Terra, is putting billions of dollars behind the coin.
Because USDD is not as large as UST, which was worth roughly $20
billion at its peak, crypto specialists think that it will not
suffer the same fate. USDD had recently been changed by Tron’s Sun
to strengthen collateralization and make it less vulnerable to a
crash like Terra. This week, Tron spent over $700 million on the
open market to sustain the USDD peg. Justin Sun also stated that a
$2.5 billion fund would be set up to help TRX. Tron has purchased
TRX on multiple occasions to support the token, most notably
withdrawing $948 million ($47 million) from Binance. The Tron DAO
has made a number of withdrawals from Binance and has also used its
USDC assets to purchase more tokens. Tron has also announced a
mining pool with Curve Finance and Convex Finance, which is
intended to attract yield-hungry traders with an estimated APR of
96.25%. Despite Justin Suns’ assertions that the USDD is unduly
collateralized, the market does not appear to agree. The trend for
TRX is likely to be negative as long as this continues, and the
next significant support is identified at $0.040. Related reading |
Why TRON Has Seen a 45% Hike in Total Value Locked (TVL) Featured
image from Pixabay, chart from TradingView.com
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