Altcoin
Tron [TRX]: USDD de-peg, FTX collapse, and everything that might affect you
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Journalist
- Tron’s stablecoin USDD de-pegged following significant USDD conversions to USDT and USDC
- TRX has since recorded massive coin distribution leading to a further price decline amid the FTX debacle
Amid the general cryptocurrency market’s decline due to the collapse of FTX, Tron’s [TRX] algorithmic stablecoin Decentralized USD (USDD) fell from its $1 peg.
Read Tron’s [TRX] Price Prediction 2023-2024
In fact, USDD fell from its $1-anchor after whale 0x3f34 exchanged 4,495,446 USDD tokens for 4,466,269 $USDT, with a ratio of 0.9935. Several hours later, another whale, 0x3155, exchanged 6,653,731 USDD tokens for 6,519,662 USDC, with a ratio of 0.9799.
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What happened on on-chain?
On November 8, whale 0x3f34 exchanged 4,495,446 $USDD for 4,466,269 $USDT, with a ratio of 0.9935.
After that, $USDD started to depeg.
18 hours ago, whale 0x3155 exchanged 6,653,731 $USDD for 6,519,662 $USDC, with a ratio of 0.9799. pic.twitter.com/US0gtAkGSB
— Lookonchain (@lookonchain) November 10, 2022
When USDD first started de-pegging, Tron founder Justin Sun opined that it might be due to troubled trading firm Alameda Research selling its USDD holdings to battle the liquidity crisis on FTX.
“I think probably Alameda just sold their USDD to cover the liquidity of FTX exchange. The pool currently is back with a healthy rate.”
TRX bearing the brunt
Suffering a 10% price decline in the last 24 hours, TRX traded at $0.05541 at press time.
However, trading volume was up by 105% within the same period. With $1.77 billion worth of TRX traded in the last 24 hours, the alt logged its highest daily trading volume in the last three months, data from Santiment revealed.
Source: Santiment
The price/trading volume disparity hinted at the severity of TRX distribution over the last 24 hours. Also, a look at the alt’s performance on the daily chart revealed the commencement of a new bear cycle on 7 November when the FTX issue came to the fore. Since then, the crypto’s price has dropped by 14% on the charts.
Severely oversold at press time, TRX’s Money Flow Index (MFI) rested at 19. Its Relative Strength Index (RSI) was also on a downtrend on the charts.
With not enough investors’ liquidity being pumped into the TRX market over the last five days, its Chaikin Money Flow (CMF) depleted significantly. At press time, it was below the central line at -0.28. Recording a negative value and positioned in a downtrend, a significant volume of TRX accumulation is required to initiate a reversal.
Source: TradingView
Finally, according to data from Coinglass, 369,530 traders have been liquidated in the general cryptocurrency market, with $696.72 million removed over the last 24 hours.
The amount of TRX liquidations within the same period totalled $2 million. This represented 0.28% of the total liquidations in the market.
Source: Coinglass
