The momentum in Tron’s price fell over the weekend and it has fallen by 40%. This cryptocurrency is currently having trouble gaining momentum.
Tron Falls AS USDD Depegs
TRX dropped 19% to $0.05 and now trades at its lowest point in fifteen months. The token was also the lowest performing among top 50 cryptocurrency in the past 24 hours.
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. 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 might be under tremendous selling pressure to close this gap as USDD falls below $1.00.
TRX found support at $0.05, and has since bounced higher. TRX’s resistance is at $0.057, and given the current fundamentals, it doesn’t appear likely that the trend will shift.
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Justin Sun Scrabbles to Save USDD
Tron like Terra is funding the coin with billions. Crypto experts believe that USDD will be spared the same fate as UST. UST was valued at roughly $20 billion in its peak.
USDD had recently been changed by Tron’s Sun to strengthen collateralization and make it less vulnerable to a crash like Terra.
Tron spent $700,000,000 on open market this week to support the USDD Peg. Justin Sun said that TRX would benefit from a $2.5 Billion fund.
Tron purchased TRX multiple times to help the token. The most notable was a withdrawal of $948 million (or 47 million dollars) from Binance. Tron DAO has made several withdrawals to Binance. It has also used USDC assets for the purchase of more tokens.
Tron also announced the creation of a pool mining with Curve Finance, Convex Finance, and which will be aimed at attracting yield-hungry traders. The APR is 96.25%.
Despite Justin Suns’ assertionsAlthough the USDD appears to be unduly collateralized the market is not agreeing. As long as the trend continues for TRX, it is expected to remain negative. The next support level is $0.040.
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Featured Image from Pixabay. Chart by TradingView.com