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

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.

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%.

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.

TRX Price Action

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

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.

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.