Tron TRX and USDD going to $0 - USDD Depeg, Same as Terra LUNA?
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Tron (TRX) has been decreasing since the end of May, but further accelerated its rate of descent last week. It is possible that the decrease is occurring as a result of the de-pegging of USDD, which had been announced as an overcollateralized stablecoin.
TRX has been falling since reaching an all-time high price of $0.18 in April 2021. Throughout this downward movement, it has bounced four times at the $0.058 horizontal support area, which had been in place since March 2021.
Ongoing breakdown
Similarly to the weekly, the daily time frame provides a bearish outlook. It shows that TRX has broken out from an ascending parallel channel. Such channels usually contain corrective movements, meaning that a breakdown from them is expected.
To further exacerbate the issue, the daily RSI has also broken down from an ascending support line (green), confirming the validity of the channel breakdown.
Monday, June 13, has turned out to be a collapse for the entire crypto world, but for Tron DAO, things somehow got even worse. As it became known at the very beginning of the day, USDD, the algorithmic stablecoin of Tron, temporarily lost its peg to the dollar. The event caused a corresponding reaction and affected the quotations of TRX, the network's native token. Against the backdrop of negative overall market conditions and additionally spurred by the USDD depeg, TRX dropped more than 16% in price.
Sun is ready to fight back
When things started to take a serious turn, Justin Sun, head of the Tron Foundation, appeared on the scene and made some important statements. He reported that the Tron DAO injected 700 million USDC to keep the USDD pegged to the dollar. Following the report, the stablecoin has now recovered and is trading at $0.99.
Earlier, Sun said that the USDD would be overcollateralized at 130% in order not to repeat the path of TerraUSD (UST). You can monitor this indicator 24/7 in the public domain on the Tron DAO Reserve website.
Despite the rebound in the peg, the TRX shorting flywheel is not stopping. Thus, Sun announced that TronDAO will direct $2 billion to combat negative funding on Binance and warned of an impending short-squeeze on TRX. Since then, TRX quotes have managed to show a small bounce, up 3%, but still remains nailed to the ground.
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#TRX #crypto #USDD
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