Tron (TRX) Bounces Back as Fears of a USDD Collapse Ease
Key Insights:
- Tron (TRX) rallied by 13.31% on Wednesday, reversing a 12.99% slide from Tuesday.
- Algorithmic stablecoin USDD recovered from current week lows, supported by the TronDAO Reserve, which delivered the upside for TRX.
- Key technical indicators are bearish. Tron (TRX) remains below the 50-day EMA despite Wednesday’s rebound.
On Wednesday, Tron (TRX) rallied by 13.31%. Reversing a 12.99% tumble from Tuesday, TRX ended the day at $0.0631.
A bearish start to the day saw TRX fall through the First Major Support Level at $0.0502 to a late morning low of $0.0469.
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Steering clear of sub-$0.0450, TRX rallied to a late high of $0.0640.
TRX broke through the First Major Resistance Level at $0.0630 to end the day on a bullish note.
Bullish market reaction to the Fed monetary policy decision and Fed Chair Powell’s press conference delivered support.
For TRX, a USDD move back through to $0.97 levels eased investor fears of another stablecoin collapse.
Algo Stablecoin USDD Recovers from $0.95 to Deliver TRX Support
Early in the week, the unpegging of algorithmic stablecoin USDD added to the market stress, leading to a 16.14% slump on Monday and Tuesday’s 12.99% tumble.
On Wednesday, USDD slid to a current week low of $0.9582 before a recovery to $0.97 levels.
TRON DAO Reserve moves to stabilize USDD provided TRX with much-needed support.
Turning to Twitter, the TRON DAO Reserve said,
“To safeguard the overall blockchain industry and crypto market, TRON DAO Reserve have transferred 100 million #USDC on TRON to Binance to purchase #TRX.”
Collateralization figures for USDD also provided comfort.
According to the TRON DAO Reserve, USDD had a collateral ratio of 317.88%.
According to Defi Llama, the USDD unpegging continued to weigh on Tron’s total value locked. At the time of writing, the total value locked stood at $4.23 billion, down 10.61% over 24 hours.
The decline in the TVL suggests further price pressure.
TRX Price Action
At the time of writing, TRX was up 0.16% to $0.0631.
Technical Indicators
Avoiding the $0.0580 pivot would support a run at the First Major Resistance Level at $0.0690. Support from the broader market would be needed for a breakout from $0.0650.
In the event of an extended rally, TRX could test the Second Major Resistance Level at $0.0751.
A fall through the pivot would bring the First Major Support Level at $0.0519 into play. Barring an extended sell-off, TRX should avoid sub-$0.050. The Second Major Support Level sits at $0.0447.
Looking at the EMAs and the 4-hourly candlestick chart (below), the signal was bearish. TRX sits below the 50-day EMA, currently at $0.0687. This morning, the 50-day EMA pulled away from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA; price negative.
A return to $0.065 would support a move through the 50-day EMA to bring $0.070 back into play.