The fact that USDD – Tron’s stablecoin algorithm has just lost it peg has caused Tron (TRX) to drop heavily.
USDD stablecoin is Tron’s decentralized algorithm with a security reserve of more than 200%. At noon on June 13, the USDD began to show signs of losing its balance as it gradually declined to 0.9912 and was continuously trading at less than $1 at the time of writing.
As the underwriting mechanism was quite similar to UST-LUNA, as soon as USDD lost its seal, TRX also recorded a heavy discount.
At the time of writing, TRX was in free fall, trading at $0.0608, with a 6.2% decline over the past 1 hour. Moreover, it has fallen by 16.3% and 17.3% in the last 24 hours and 23.7% in the previous seven days, respectively.
Moreover, the Relative Strength Index (RSI) fell to 14.49 from 54.34 in less than 24 hours. The RSI indicator appears to be in the oversold zone for some time. The excellent oscillator (AO) also starts flashing red bars ascending below zero, posting flashing some green bars.
TRX’s ongoing price performance suggests investors cannot yet dream of recovery. The expectation of a new HBG, needless to say, is also groundless. Only time will tell us whether TRX is finally prepared for its long breakup.
TronDAO Reserve cash payment for holding of key deposit
Shortly after the two Tron blockchain currencies saw this heavy devaluation, TronDAO Reserve pumped $700 million to buy back TRX on the floor, helping bring USDD back to $1. This also helped bring the mortgage rate to 280%.
However, these efforts appear to be fruitless as USDD is still trading at $1, and TRX is recording a 15.6% decline at the time of writing. The funding rate short $TRX is heavily negative on Binance, proving the quick team is highly crowded, and Justin Sun looks set to spend $2 billion to save the situation.
Although with reserves of 3 times the amount of USDD in circulation, many people still do not have much faith in Tron’s stablecoin model.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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