Tron Price Hits 5-Month High After Announcing ‘Gasless Stablecoin’

Tron (TRX) reached its highest level in five months as traders assessed its founder Justin Sun’s announcement about a so-called “gasless stablecoin” launch in the fourth quarter of 2024. But technical indicators point to an imminent price correction ahead.

TRX is Outperforming Crypto Market

On July 11, TRX’s price jumped circa 3% to $0.135, a level it last touched in March. Looking broadly, the Tron cryptocurrency’s intraday rise is part of a prevailing rebound trend that started four days ago, bringing its net returns in the same period to a little over 10%.

In doing so, TRX has outperformed the broader crypto market returns, which rose by around 8.80% in the same period. The Tron token’s market dominance has increased by 5.80% from its local low, indicating growing capital inflows from rival cryptocurrencies to its market.

At the core of this outperformance is Justin Sun’s Announcement that his team is building a gasless stablecoin solution that will make peer-to-peer transfers free of charge. For the uninitiated, a gas fee is a cost required to perform transactions on a blockchain, typically paid to compensate miners or validators for their work in processing and securing those transactions.

Sun’s gasless stablecoin initiative will launch on the Tron blockchain in the fourth quarter of 2024 and will later expand to Ethereum and other Ethereum Virtual Machine (EVM)-compatible chains.

Nonetheless, the Tron team has not specified how it plans to create a free-to-use stablecoin system. Moreover, it has not mentioned the impact of such a project on the income of its validators, the effect of which can be seen in the total-value-locked (TVL) across its blockchain ecosystem.

According to data resource Defi Llama, Tron’s TVL has dropped by 760 million TRX since Sun’s announcement.

Tron Technical Analysis: Bearish Divergence Risks Declines Next

Tron’s price rise in recent days is diverging from its falling daily relative strength index (RSI) and trading volumes—leading to a technical phenomenon called bearing divergence.

The RSI measures the speed and change of price movements, often indicating overbought or oversold conditions. When the price rises while the RSI falls, it suggests that the upward momentum is weakening.

As of July 11, TRX was hovering just below its interim resistance level of around $0.136, coinciding with its 0.786 Fibonacci retracement line. A pullback scenario, led by the bearish divergence setup, could have the cryptocurrency test its 0.618 Fib line at around $0.130 in July.

Conversely, a breakout above $0.136 could push TRX toward its 1.00 Fib line at around $0.143, up about 6.5% from the current price level, in July.