Why Justin Sun Reported A 500% APR To Short TRX On Binance
13 Juni 2022 - 5:22PM
NEWSBTC
TRON (TRX) founder Justin Sun has come out in defense of the
network stablecoin, USDD. The digital asset began deppeging from
the U.S. dollar value and hinted at another catastrophic event in
the crypto market, like the one experienced by Terra (LUNA) and its
native stablecoin UST. Related Reading | TA: Bitcoin Dives
10%, Why BTC Could Even Break $25K At the time of writing, the
value of TRON’s stablecoin has been climbing back to its 1:1 parity
to the U.S. dollar. Earlier, the digital asset started trending to
the downside forcing the TRON DAO Reserve, the entity responsible
for protecting USDD’s peg, to deploy $2 billion. This created an
increase in selling pressure for TRX which moved to the downside on
the back of this event, and a crypto market already trending to the
downside along with traditional investments. Justin Sun wrote the
following via his Twitter account, at this time, TRX shorters had
the opportunity to benefit from market conditions: Funding rate of
shorting TRX on Binance is negative 500% APR. Trondao Reserve will
deploy 2 billion USD to fight them. I don’t think they can last for
even 24 hours. Short squeeze is coming. The TRON DAO Reserves
continued to inject millions to protect the USDD peg to the U.S.
dollar. Due to its mint and burn mechanism, the price of TRX broke
below critical support levels but became more stable as USDD
returned to its U.S. dollar parity. In the last few hours, the
entity in charge of protecting USDD claims it has increased the
stablecoin’s collateralization to meet “extreme market conditions”.
The collateralization rate reported by this entity stands above
300%. The entity wrote the following: To safeguard the overall
blockchain industry and crypto market, TRON DAO Reserve have
increased 650,000,000 USDC supply on TRON. Currently USDC supply on
TRON has reached $2.5 billion. Who Is Buying TRX, Conditions For A
Short Squeeze? Data from Material Indicators shows thin support for
TRX’s price as it approaches these levels. Currently, there are
around $500,000 in bid orders with no extra support below. This
suggests TRX’s price could continue to see losses if bulls are
unable to maintain current levels. Additional data from Material
Indicators records an increase in selling pressure from small
investors. As seen below, retail investors (yellow and green on the
chart) have been shaken out of their positions as TRX crashes.
Larger investors seem more resilient and willing to buy into the
current price action. Related Reading | Bitcoin Drops To
18-Months Lows, Has The Market Seen The Worst Of It? This could
support a short squeeze scenario, as Sun claimed. However, the
market continues to trend to the downside and could re-test lower
levels.
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