The TRX token has stabilized at its lowest point in four weeks. Since December, it has dropped over 50%. On Monday, TRX hit a record low of $0.2200. Its market cap then fell from $260 million to $190 million.
Despite this, Tron founder Justin Sun remains optimistic. He suggested buying during the crypto dip on X (formerly Twitter). Sun believes the TRX token is undervalued. He cites the strong infrastructure of the Sun and network as support.
Sun has good reasons for being so bullish. Tron is a big name in the DeFi industry as per the current market and has a TVL of $6.69 billion, securing the third position after Ethereum and Solana.
It also rules the network in Tether (USDT) transactions, leaving Ethereum behind due to the high cost of transacting the latter. Specifically, payments made in Tron’s USDT increased by 91% to $137 billion on Monday, solidifying Tron as one of the world’s biggest payment systems. Today, the Tron blockchain has more than 59.2M USDT holders.
Tron Leads In DEX Volume And Staking Rewards
In the DEX sector, Tron is still a standout, as it has processed nearly $100 billion in trading volume. Last week, its DEX protocols processed $782 million in tokens, ranking it among the top 10 chains.
The number of active addresses is still high; in March 2021, Tron had more than 2.17 million active monthly addresses, a close second to Solana’s 4.27. Tron also has very good staking returns, which stand at 4.52%, which will be interesting for long-term investors. Incrementing network fees and a decreasing circulating supply accompany this yield.
The TokenTerminal data reveals that Tron has garnered $2.21 billion in fees in the past 12 months and overtook Ethereum as the highest fee revenue this year. Tron’s circulation in its ecosystem has reduced from 88.1 billion tokens in January last year to 86.17 billion tokens today, adding more solidity to the already strong tokenomics.
Technical analysis reveals that TRX’s fate has the potential to be reversed. In the daily chart, cryptocurrency forms a bullish pattern: a double bottom at $0.2245, with the neckline at $0.2760. This pattern is normally bearish, but since a bullish impulse preceded it, it points towards a further bounce if TRX manages to hold above the $0.2245 support.
Still, the dominant trend is down as the broader market pulls back. The TRX price is below 50 WMA and 100 WMA, indicating that this digital currency is bearish based on the movement indicators MACD and RSI. A breakdown through the $0.2245 level looks set to drag TRX lower towards $0.20 as it supports the ascending trend line that joins key lows beginning from June last year.
As the price of Tron suffers from the overall bearish market scenario in the crypto sphere, Sun’s faith in the basic structure of Tron for investors is a bright spark. The network has strong tendencies in DeFi usage, USDT transactions, and the staking reward and could get increased attention if the double-bottom pattern turns into an upward movement.
But the days to come are very sensitive. Whether Tron manages to stay above this level or, conversely, declines below it will likely shape this cryptocurrency’s near-term direction. The focus is on TRX as investors try to differentiate between the risks and rewards in the extremely fickle crypto market.
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