TRX Price Dips to $0.15 Amid Speculation on Tron Memecoins
The price of Tron [TRX] has experienced a decrease of over 6% in the previous week, driven by the downward trend of Bitcoin [BTC], currently trading at $0.15 at the time of writing.
Interestingly, there was a notable surge in TRX following the introduction of SunPump, a platform built on Tron that focuses on memecoins. Memecoin transactions have now surpassed stablecoin transfers on the network.
With memecoins being known for their volatility, the rise in their prominence over stablecoins brings up a significant question: Could this shift in activity pose a threat to the long-term value of TRX?
Impact of Memecoin Culture on Tron’s Stability
Earlier this year, the Tron network was dominated by stablecoins, accounting for approximately 98% of transactions.
However, since the launch of SunPump in early August, there has been a drastic change, with stablecoin activity now making up about 75% of the network’s transactions.
This shift highlights a noticeable trend where a majority of Tron users are moving towards more volatile tokens, potentially making TRX’s value more unpredictable.
For instance, the number of investors holding SUNDOG, the largest memecoin on the Tron network by market cap, has increased to 220,269 in just 20 days.
In contrast, the volume of USDT on the Tron network has decreased significantly. Prior to the SunPump launch, USDT volume was at $100 billion, but it has now dropped to $63 billion, showing a substantial 37% decline.
According to CryptoCrypto, this trend suggests a potential instability in Tron’s ecosystem, as a reduction in stablecoin volume alongside a surge in memecoin activity could heighten volatility and push TRX price downwards.
So, has this scenario unfolded?
Decoding the Impact through USDT Net Flow
Following the early August launch of SunPump, TRX’s value saw a positive trend for two consecutive weeks, testing the $0.17 resistance level.
However, this optimism was short-lived as TRX retraced and experienced a bearish pullback below the $0.15 threshold.
In essence, even the dominance of memecoins couldn’t shield TRX from the ripple effects of Bitcoin’s volatility.
Interestingly, data reveals a significant $0.142 billion USDT outflow on the Tron network, indicating a renewed interest in stablecoins among investors.
The rising outflow of stablecoins may lead to a TRX price correction, signaling that more investors are converting USDT to TRX during price declines or when they see a profitable opportunity.
Overall, if these trends continue, TRX might be on course for a reversal. However, a shift towards memecoin investments could introduce uncertainties for TRX, as memecoin holders often focus on short-term gains.