Altcoin
Tron becomes second largest chain by TVL; does this mean celebration for TRX
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- Tron outcompetes most of its rival networks in terms of TVL
- However, TRX faces resistance in its attempts to cross above its 50-day MA
The Tron network can be considered as one of the blockchains that have managed to achieve noteworthy growth so far this year. The network is about to end 2022 on a positive growth trajectory after dethroning the Binance Smart chain to become the second largest crypto network by TVL.
Read Tron’s [TRX] price prediction 2023-2024
Tron’s total value locked recently crossed above the $4.39 billion mark which puts it slightly above the BSC by roughly $260 million. This achievement puts Tron second on the list after Ethereum [ETH] which has over $23 billion in TVL. However, this achievement speaks volumes for Tron’s journey, as well as for the future of its native cryptocurrency, TRX.
— TRON DAO (@trondao) December 17, 2022
Tron’s higher ranking in terms of TVL can translate to higher demand for the network. In other words, it means investors could have high hopes from the ecosystem. Furthermore, it could translate to higher demand for TRX over time and positive sentiment.
If this ends up being the case, then it might yield stronger demand for TRX in the long-run.
But what about TRX’s short-term performance?
An analysis of TRX’s market cap revealed that it was down by roughly $360 million in the last four days. Nonetheless, this represented a slight recovery by as much as $170 million in the last 24 hours.
Source: Santiment
However, can this market cap show some stability in growth over the next few days? Perhaps the weighted sentiment may tell us a thing or two about how investors feel about TRX.
The weighted sentiment metric revealed that the collective investor sentiment favored the bears in the last three days.
Source: Santiment
The lower weighted sentiment also favored the bears and reflected the press time observation with TRX’s price action. The cryptocurrency has been on an overall upward trajectory since mid-June.
However, it has been facing sell pressure especially after coming into contact with its 50-day moving average. Unsurprisingly, TRX’s price has been struggling with resistance at every attempt to cross above the 50-day MA.
Source: TradingView
Can the TVL performance lock in more demand?
TRX’s press time outlook based on price action confirmed that the bulls were having a hard time. On the other hand, Tron’s growing TVL didn’t underscore an increasingly stronger network position. In an ideal world, such a development should encourage favorable investor sentiment.
However, one could only wait and watch to see if that would be the outcome over the next few days.
