- Tron price went parabolic after the latest American inflation data.
- USDD, Tron's stablecoin, has regained its peg.
Tron price went parabolic on Tuesday after the US published encouraging consumer inflation data. It also rebounded after USDD regained its peg after crashing below $1. TRX was trading at $0.053, which was the highest level since Sunday this week.
US inflation data
The main catalyst for Tron, cryptocurrencies, and the stock market was the latest American inflation data. According to the Bureau of Labor Statistics (BLS), the headline consumer inflation data dropped from 7.7% in October to 7.1% in November. On MoM basis, inflation edged lower to 0.1%.
Core inflation, which excludes the volatile food and energy products, crashed from 6.3% to 6.1%. This is a sign that Fed’s actions to tame inflation are working. It has hiked interest rates by 400 basis points and started implementing its quantitative tightening (QT) policy.
The latest inflation data came a day ahead of the latest Federal Open Market Committee (FOMC) monetary policy meeting. Economists expect that the soft inflation data will put pressure on the Fed to sound a bit dovish.
In this regard, they expect that the Fed will hike rates by 0.50% after increasing by 0.75% in the past four straight meetings. It will also hint that it will hike at a slower pace in the next few meetings. Historically, cryptocurrencies like Tron tend to underperform in periods of high-interest rates.
Tron price also rebounded after USDD regained its peg. It had briefly lost its peg and dropped to a low of $0.9600. In a statement, Justin Sun pointed users to its website, which has data on its collateral basis.
Data shows that the stablecoin has a 200% collateral ratio since it is backed by over $1.4 billion worth of assets. It is backed by 10.9 billion TRX, 14,040 BTCs, 4 USDT, and 392k USDC. Users should remember that Terra had bought billions of assets to back UST before its collapse.
Tron price prediction
The 4H chart shows that the TRX price has been in a strong bullish trend in the past few hours. In this period, it remains above the ascending trendline shown in black. It has also moved slightly above the 25-day and 50-day moving averages and is approaching the key resistance level at $0.0550.
Therefore, I suspect that the coin will continue rising as buyers target the next key level at $0.055. A move above this resistance will see it rise to the key level at $0.060.
