The Tron price crashed hard as investors reacted to the rising risks of its stablecoin that is known as USDD. The TRX token crashed to a low of $0.055, which was the lowest level since January this year. It has crashed by more than 32% from its lowest level in May this year.
Tron is one of the best-known blockchain projects globally. It is a platform that was started by Justin Sun, a computer programmer who paid millions to have lunch with Warren Buffett.
Today, Tron has become a leading blockchain operating system that powers stablecoins worth billions every day. It is also a key player in the Decentralized Finance (DeFi) as the total value locked (TVL) in its ecosystem has surged. It is now the third-biggest player in the sector after Ethereum and BNB Chain.
Tron also recently became a big player in the stablecoins industry as the developers launched a new coin known as USDD. It is an algorithmic coin that has a close resemblance to the now-dead Terra USD.
USDD saw a lot of growth as its total market cap jumped from zero to over $750 billion in less than two months. Investors bought the coin even as risks of de-pegging remained since it is not backed by anything.
Now, it seems like these risks are coming to life as the price of the USDD stablecoin moved below $1 for the first time on record. At the time of writing, the coin is trading at $0.98, giving it a market cap of $711 million.
Therefore, in my view, I believe that USDD is the biggest risk that Tron’s TRX faces. Since it is not backed by anything, there is no reason to believe that its price will not de-peg as happened with Terra.
The daily chart shows that the TRX price has been in a strong bullish trend in the past few months. It even defied gravity as other coins crashed. The coin found a lot of resistance at $0.092, which was along the upper line of the ascending channel.
A closer look at the chart shows that the coin has now moved below the lower side of the channel and crossed the 25-day and 50-day moving averages. The Relative Strength Index (RSI) has also crashed below the oversold level.
Therefore, there is a likelihood that the Tron price will continue falling as bears target the next key support at $0.05.
The post Tron Price is at a Major Risk of USDD De-Pegging appeared first on CoinJournal.
