Does Tron’s latest plan safeguard the market or is TRX at the center of it all

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  • Tron expe­ri­enced a sharp crash in the last eight days, with the price drop­ping to a new 2022 low
  • Investor sen­ti­ment towards TRX seemed pos­i­tive over the last few days 

Tron’s native cryp­tocur­ren­cy TRX took a hit in the last few days, as did many top cryp­tocur­ren­cies. Inter­est­ing­ly, the Tron DAO Reserve just announced a plan to pur­chase TRX worth rough­ly $10 mil­lion from the market.


Read Tron’s [TRX] price pre­dic­tion 2023–2024


Spec­u­la­tion around Tron sug­gest­ed that the deci­sion may be aimed at reignit­ing demand for TRX since it has been on a bear­ish tra­jec­to­ry. Accord­ing to the offi­cial announce­ment, the move aimed at cre­at­ing a safe­ty net for the cryp­tocur­ren­cy industry.

The announce­ment did not dis­close how exact­ly this was going to safe­guard the cryp­to mar­ket. It seemed unlike­ly to be the rea­son for the pur­chase con­sid­er­ing that TRX oper­ates across over 10 exchanges. At first glance, the idea that it might have been to reignite bull­ish demand also seemed unlike­ly. This was because the amount pur­chased rep­re­sent­ed just 0.002% of TRX’s mar­ket cap.

TRX expe­ri­enced a sharp crash in the last eight days, with the price drop­ping to a new 2022 low ($0.0452) on 14 Novem­ber. The last time it trad­ed at that price range was in March 2021.

TRX price action

Source: Trad­ingView

Could it be a mere coin­ci­dence that the Tron DAO reserve just decid­ed to buy back TRX when it was deeply oversold?

There was no deny­ing that the announce­ment may have cur­tailed the down­side. Nev­er­the­less, the weight­ed sen­ti­ment met­ric indi­cat­ed that investor sen­ti­ment improved in favor of the bulls in the last three days.

TRX sentiment and volume changes

Source: San­ti­ment

Fur­ther­more, the shift in weight­ed sen­ti­ment meant that investors were already buy­ing in antic­i­pa­tion of a piv­ot. The vol­ume increase in the last two also sug­gest­ed that incom­ing buy­ing pres­sure had been build­ing up and the Tron DAO Reserve announce­ment was made at the oppor­tune time.

It may have con­tributed to a stronger sen­ti­ment shift since investors are like­ly to be more con­fi­dence if  Tron itself is buy­ing TRX from the mar­ket. Tron’s mar­ket cap bounced by as much as $360 mil­lion as of 14 November.

TX market cap

Source: San­ti­ment

Are TRX bulls really back?

The sen­ti­ment shift and the strong mar­ket cap increase indi­cat­ed a strong demand near the recent bot­tom. It will also be inter­est­ing to see if TRX can man­i­fest enough bull­ish demand to recov­er from the over­sold zone.

Fur­ther­more, it was also pos­si­ble that we could see price sup­pres­sion in the event that it fails to secure enough bull­ish demand. Both the FTX and Binance fund­ing rates dropped sig­nif­i­cant­ly in the last few days cour­tesy of the mar­ket headwinds.

TRX funding rates

Source: San­ti­ment

The fact that the fund­ing rates have not recov­ered yet, might be a sign of low demand from the deriv­a­tives mar­ket. Investors should thus, keep an eye out for changes that may clear up the pre­vail­ing uncer­tain­ty in the next few days.



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