Data shows the Tron Sharpe Ratio has observed a rapid increase into a territory that has proven to be bearish for TRX’s value in the past.

Sharpe Ratio Could Imply Tron Is Overheated Now

As explained by an analyst in a CryptoQuant Quicktake post, the 180-day of the Tron Sharpe Ratio is now flashing a red alert. The “Sharpe Ratio” here refers to an indicator that compares the returns of a given asset with its risk.

Its value is calculated as the difference between the asset’s expected return and the risk-free rate of return, divided by the volatility. This metric tells us whether the returns of the commodity are worth the risk involved with it.

Below is the chart shared by the quant that shows the trend in the 180-day version of the Sharpe Ratio for Tron over the last few years:

The value of the metric seems to have been sharply going up in recent days | Source: CryptoQuant

As the above graph shows, the 180-day Tron Sharpe Ratio has recently observed some rapid growth and reached what has historically been the ‘red’ zone.

In the chart, the quant has highlighted the instances of the metric breaching into this region during the last few years. TRX appears to have generally hit some top whenever the indicator’s value has risen this high.

Tron is now inside this same high-risk zone once again, but it’s possible that the coin may not immediately hit a top, as the indicator is still at a lower level than during some of the tops. The analyst cautions, however, saying:

While TRX may continue its upward trend in the short term, holding positions in a high-risk zone like this can be detrimental. The potential for gains becomes limited compared to the increased likelihood of a sharp pullback, making this an unfavorable situation for long-term strategies.

It remains to be seen how the cryptocurrency price will develop from here on out, considering the trend that has emerged in its 180-day Sharpe Ratio.

In some other news, the supply of Tether’s stablecoin, USDT, has recently witnessed considerable Tron network growth, as CryptoQuant community analyst Maartunn pointed out in an X post.

The value of the metric appears to have been sharply going up recently | Source: @JA_Maartun on X

The USDT supply on Tron has gone from $47.75 billion to $65.7 billion over the past year, representing an increase of more than 37%. This rise naturally shows how interest in using the stablecoin has increased on the network.

TRX Price

Tron broke through the $22 level a few days ago, but it appears the asset has since witnessed a cooldown in bullish momentum, as its price is now floating around $20.

Looks like the price of the coin has observed considerable growth over the last few weeks | Source: TRXUSDT on TradingView

Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com

LUNC News: The world’s largest crypto exchange Binance has increased leverage by four times for Terra (LUNA) trading. The move comes as the exchange extended support for the Terra Luna community amid the bankruptcy of Terraform Labs. LUNA, LUNC and USTC prices all jumped amid the massive buying sentiment in the broader crypto market.

Binance Offering Four Times Leverage on Terra Luna Trading

In an official announcement by Binance, the crypto exchange revealed updated leverage and margin tiers of LUNA2USDT. The exchange has increased leverage and reduced maintenance margin rate, coming as major news for the broader LUNC community.

The changes were exclusively made for traders looking to take a position of 0 to 5000, 5000 to 25,000, and 25,000 to 100,000. The exchange increased leverage from 11-20x to 51-75x for a position of 0 to 5000, indicating support for Terra Luna price rally.

Also, Binance announced changes in XEMUSDT, ORBSUSDT, LOOMUSDT, LUNA2USDT, QNTUSDT, CHRUSDT, and JOEUSDT USD-M perpetual contracts.

LUNC News: Massive Bullish Momentum Signals

Terra (LUNA), LUNC, and USTC show massive bullish momentum as prices move above support levels. The community also seeks another major token burns from wallets related to beleaguered Terraform Labs and Luna Foundation Guard (LFG).

Terra (LUNA) price trades at $0.502, up 5% in the last 24 hours and 45% in a month. The 24 hour low and high are $0.4746 and $0.5036, respectively. Derivatives trading activity is on the rise amid Binance’s changes to leverage, as per Coinglass data.

Meanwhile, LUNC price has jumped 6% today and 33% this month. The price currently trades at $0.0001221, with a 24-hour high of $0.0001234. USTC price has climbed 10% in a month. Trading volume has increased by 15% in the last few hours.

Total LUNC futures open interest has surpassed the 100 billion mark, up more than 10% in the last 24 hours. 1000LUNC futures open interests on Binance and Bybit have climbed over 9% in the last 24 hours, indicating buying activity among traders.

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Varinder Singh

Varinder has over 10 years of experience in the Fintech sector, with over 5 years dedicated to blockchain, crypto, and Web3 developments. Being a technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers. With CoinGape Media, Varinder believes in the huge potential of these innovative future technologies. He is currently leading the news team to cover latest updates and developments in the crypto industry.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.