Tron (TRX) has somewhat recovered from the selling ignited by rumours of Huobi becoming insolvent due to the news of job cuts at the exchange. Over the weekend, Justin Sun confirmed that Huobi would reduce its workforce by 20% in the first quarter of 2023.
Mr Sun had also told Reuters that the ‘structural adjustments’ are yet to start and would constitute ‘short-term pain’, eventually bringing advantages to Huobi.
Potential Layoffs at Huobi Trigger Massive Withdrawals
News of Huobi laying off 20% of its staff resulted in its users withdrawing their funds to prevent a repeat of a collapse as the one witnessed with FTX in early November. Data from Cryptoquant.com shows that Huobi’s Bitcoin reserves dropped by 4.3% from 39k BTC to 37.3k BTC, as seen in the chart below. The chart also shows that Bitcoin reserves at Huobi have since stabilized.
Tron (TRX) Dips, then Recovers After Huobi’s Withdrawals Subside
The rush to withdraw funds at Huobi also affected the price of Tron (TRX). Before the bank run on Huobi, Tron was trading at around $0.054, only to drop by 7.8% to a local low of $0.04976. Tron has since bounced back and is now above the 50-day moving average (white), as seen in the one-day TRX/USDT chart below courtesy of Tradingview.com.
Also, from the chart, it can be observed that Tron (TRX) remains above the crucial 200-week (red) moving average, indicating that it remains in bullish territory despite the recent events at Huobi.
Its daily MFI (green), MACD and RSI (red) hint at a neutral situation that could result in consolidation of Tron at current levels before another push towards the 100-day (yellow) moving average around the $0.057 price area.
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