Bitcoin Falls Below $35,000 as Tron Continues Its Rally
- BTC’s price fell to as low as $34,200, on May 8.
- Fee reward ratio presented a dominantly bearish market-like situation for the larger crypto market.
- However, Tron’s TRX token rallied on bullish sentiment.
Bitcoin (BTC) made lower lows, over the past four days, slipping past some of its crucial support zones as volatility and losses knew no bounds. As highlighted in a previous FXEmpire article, most top tokens like AVAX, LUNA, and AAVE registered losses on their daily and weekly charts.
Strangely, however, Tron’s TRX made a power-packed comeback, rallying even as the global crypto market cap continued its downtrend.
Tron rallies against odds
The Tron ecosystem has been on fire lately, which has ensured a bullish narrative for TRX even as the larger crypto market falls in heavy losses. Tron’s algorithmic stablecoin USDD went live last week and has since been listed on several platforms for decentralized finance (DeFi) protocols.
Tron DAO Reserve subsequently announced that it purchased 504.6 million TRX to back the algorithmic stablecoin, as the project aims to leverage a decentralized forex reserve similar to Terra’s UST reserves.
— H.E. Justin Sun 🅣🌞🇬🇩 (@justinsuntron) May 7, 2022
On Saturday, Tron’s founder Justin Sun revealed that the team behind the project had purchased 504,600,250 TRX at an average price of 0.07727 per unit. According to the Tron DAO Reserve, this buy aims to “safeguard the overall blockchain industry and crypto market.”
Notably, TRX’s price rose in tandem with the ecosystem-centric announcements. TRX’s price jumped by almost 47% since May 1 amid heightened positive social sentiment for the ecosystem and its native token.
At the time of writing, TRX traded at $0.09067, noting 7.77% daily and 32.64% weekly gains.
Notably, Tron following Terra’s UST reserve system for its USDD stablecoin has acted in favor of TRX’s trajectory. However, the question remains whether TRX gains could be sustained. Well, sustaining long-term gains could depend on the larger crypto market, so let us look at BTC and the larger trajectory.
Short-term holders trigger BTC losses
One of the reasons for the recent BTC losses could be short-term investors taking quick profits or exiting the market too soon. Looking at the exchange inflows for BTC, it was clear that inflows involved coins dormant for a maximum of three months and thus likely to be owned by more speculative investors.
Additionally, CryptoQuant analysts suggested that the Fee/Reward Ratio indicated that we are in a bear market. Miner’s Fee to Reward Ratio is usually high during the bull market, while at its lowest point during the bear market.
After BTC registered $65,000 ATH, the Fees to Reward Ratio has dropped significantly, indicating a bear market and miners’ incentive to sell their reserves to cover their expenses.
Looking at the larger market’s bearish condition, it would be interesting to see how TRX’s rally pans out.