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Tron (TRX) Bounces Back as Fears of a USDD Collapse Ease

By:
Bob Mason
Updated: Jun 16, 2022, 00:21 UTC

The US Federal Reserve and TRON DAO Reserve deliver TRX with much-needed support on Wednesday. Downside risks remain, however.

Tron finds USDD support.

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.

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.

USDD recovers from sub-$0.96
USDD 7-Day Chart 160622

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%.

USDD collateral ratio up
USDD Collateral 160622

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.

TVL Points to a TRX fall.
TRON TVL 160622

TRX Price Action

At the time of writing, TRX was up 0.16% to $0.0631.

USDD steadies to give TRX support.
TRXUSD 160622 Daily Chart

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.

A TRX move to $0.065 would signal a breakout.
TRXUSD 160622 Hourly Chart

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.

Indicators continue to flash red.
TRXUSD 160622 4-Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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