The TRX demand zone of 4 billion USD indicates where the price of Tron is heading.

Tron (TRX) has experienced significant growth, reaching a 5-month high. However, the recent momentum seems to be losing steam, signaling potential for a correction. Although this asset is performing well, there are signs that TRX may be overvalued in the short term, which could lead to a retreat.

Tron is overvalued

According to forecasts from Glassnode, the NVT indicator (Network Value to Transaction) of Tron has surged, reaching the highest level in the past 1.5 months. NVT measures the ratio between market value and transaction volume of the network. An increase in NVT often signals that the market value of an asset is far exceeding its trading activity, indicating overvaluation. In the case of TRX, the rise in NVT is a potential warning sign.

With the rising NVT ratio, TRX may face downward pressure as investors adjust their expectations. Overvaluation can lead to sell-offs, especially if market sentiment turns cautious.

Therefore, it seems that there will be an adjustment, especially when the overall crypto market is undergoing a cooling period.

! TRX NVT Rate | Source: GlassnodeDespite concerns about overvaluation, the general macro dynamics suggest that TRX may not see a sharp correction. According to IntoTheBlock's IOMAP indicator, a strong demand zone appears between $0.268 and $0.276, where about 13.89 billion TRX, worth nearly $4 billion, has been bought.

This strong accumulation area provides a buffer for TRX, as investors buying at this level find it difficult to sell without making a profit. The demand zone is crucial as it represents a floor price that can prevent TRX from dropping too deep. The market shows interest in this price range, therefore the likelihood of TRX falling below $0.276 in the short term will be hard to occur.

If TRX does indeed undergo a correction, the price will find solid support in this area, maintaining the critical level of $0.276.

Tron IOMAP | Source: IntoTheBlock## Will the TRX price reverse and decrease?

TRX has increased by 7.45% over the past week and is currently trading around $0.285. It is currently facing resistance at $0.286, which is a tough level to break. With the recent growth momentum, this token is approaching a critical point. If it fails to break through the resistance at $0.286, TRX may face a pullback as investors take profits.

If the overvaluation causes a weakening trend, TRX may drop below $0.282 and head towards the support level of $0.275. TRX is unlikely to fall below this level due to the strong demand zone around $0.268 to $0.276 providing support for the price. The correction is expected to be moderate, with demand zones preventing significant declines.

! Tron Price Analysis | Source: TradingViewConversely, if the overall market maintains bullish sentiment, TRX could break through the $0.286 resistance level. Successfully breaking this barrier could send TRX towards the $0.290 level. This will invalidate the bearish outlook and set the stage for stronger growth.

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