The purchase of $50 million worth of Bitcoin and Tron (TRX) is part of Tron DAO’s mission to overcollateralize the stablecoin of USDD by a minimum of 130%. At the time of writing, the algorithmic stablecoin of USDD is overcollateralized by a factor of 197% as highlighted in the screenshot below courtesy of the USDD website.
USDD Reserves = 14k BTC, 140M USDT and 1.906B TRX
In addition, the screenshot above points out that USDD is currently backed by 14,040.6 Bitcoin, 140 million in Tether (USDT), and 1.906 Billion Tron (TRX). USDD reserves are also currently valued at $683.515 million.
Bitcoin Hits a Local low of $28,099
The $50 million purchase of Bitcoin and TRX by the Tron DAO reserve comes at a time when BTC is undergoing a considerable pullback to a local low of $28,099 set only moments ago. The daily BTC/USDT chart below still points towards a bearish few more days for Bitcoin. The daily MFI, RSI and MACD hint at a continuation of selling below the 50-day moving average (white)
Bitcoin’s 6-Hour Chart Hints that the $28k Support Might Hold.
However, as highlighted below, Bitcoin’s 6-hour chart hints that the selling could find a short-term floor at the $28k support area.
Furthermore, $28k could be a considerable support zone for Bitcoin given that the 6-hour MFI and RSI hint at an oversold scenario. But caution is advised attempting to long Bitcoin at current levels given the low trade volume that is characteristic of weekends during crypto bear markets.
Consequently, a wait and see approach might be a more logical move given that Bitcoin is yet to retest the $26,700 low set during the crypto market sell-off catalyzed by UST’s depegging event in early May.