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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.
USDD de-pegging
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.
Learn more about how to trade Tron.
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.
Tron price prediction
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.
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