Second largest cryptocurrency on the market desperately needs network activity
The new week in the cryptocurrency market started with a mild drawdown as the majority of assets moved into the red zone, losing 1-2% of their value on average. However, some assets are facing increased selling pressure due to underlying flaws recently pointed out by users.
Ethereum has no support
The market’s second-largest cryptocurrency has failed to find support from investors after Ethereum’s burn rate plummeted. Ethereum is still consolidating at local resistance levels and has failed to break through despite repeated attempts.
Trading volumes also suggest a lack of traction for Ethereum in the market, with trading volumes for the second-largest cryptocurrency declining for more than a month.
The lower burn rate is due to throttling of network activity. Unfortunately, it is not clear when Ethereum network activity will return to he 2021 levels. His two big sources of network activity on Ethereum were NFTs and his DeFi industry.
TRX faces criticism against USDD
USDD, another algorithmic stablecoin backed by TRON’s volatile assets, has recently been the subject of controversy in the cryptocurrency community. , worrying about the stable asset condition after the temporary unpeg to $0.97 without any undue selling pressure.
Deploy more capital – stable youth https://t.co/55pra5wQMi https://t.co/CexyaBy2hx
— HE Justin Sun 🌞🇬🇩🇩🇲🔥 (@justinsuntron) December 12, 2022
Justin Sun recently announced the deployment of additional capital, but the lack of impact on the USDD’s market price suggests that the spiral has already been overhyped and the outflow of funds has pushed the value of the USDD down too far, causing it to slip. It indicates that the tablecoin may not be saved. 200% overcollateralization.
However, the stated 200% collateral does not mean that the stablecoin is backed 1:1 with USD value. Most of these assets are volatile, and by deploying them to the market Sun falls into the Luna/UST trap. If the floating assets that Tron uses to collateralize USDD fall in value, there will be no assets supporting the value of USDD, effectively showing Luna 2.0, but with less market impact.
Shiba Inu relief bounce
The Shiba Inu’s 900% burning spike highlighted yesterday didn’t go unnoticed by the market, with a significant rebound from the key price level of $0.000008. Below that, Shiba Inu is nearing a multi-month low, causing even more losses among SHIB holders who have been dealing with one of the lowest profitability levels on the market.
A spike in the burn rate could be the beginning of a positive trend as more SHIB tokens are taken out of circulation and the pressure to sell the token is reduced. Unfortunately, investor risk appetite is still at a very low level. and assets like the Shiba Inu are less likely to recover.