Tron (TRX) Faces Overvaluation Warning, but $4B Demand Zone Could Limit Downside Risk

Tron Price Nears Key Resistance as Overvaluation Signals Mount

Tron (TRX) has recently rallied to a five-month high, buoyed by strong investor interest and broader crypto market momentum. However, indicators now suggest the token may be entering overvalued territory—raising the prospect of a near-term correction.

Despite this cautionary backdrop, a robust $4 billion demand zone offers a safety net, potentially limiting any downside movement and setting a clear path for the token’s next move.

TRX Overvaluation Raises Short-Term Red Flags

The Network Value to Transactions (NVT) ratio—a key metric used to evaluate the relationship between a blockchain’s market cap and its transaction volume—has surged to its highest level in over six weeks. A rising NVT suggests the price of an asset is increasing faster than its actual usage, often interpreted as a sign of overvaluation.

For TRX, this surge implies that market enthusiasm may have temporarily outpaced underlying fundamentals. If investor sentiment cools, a price correction could follow, especially as traders look to lock in profits after the recent rally.

Demand Zone Between $0.268–$0.276 Provides Strong Support

While the overvaluation signals caution, Tron’s price action is also supported by one of the strongest accumulation zones seen in recent months. According to IntoTheBlock’s IOMAP (In/Out of the Money Around Price) data, approximately 13.89 billion TRX—worth nearly $4 billion—was acquired between $0.268 and $0.276.

This concentrated buying activity provides a solid foundation of support. Investors who entered at these levels are less likely to sell at a loss, which should help prevent TRX from falling below this range even in the event of a correction.

What’s Next for TRX Price?

At the time of writing, TRX is trading at $0.285, just below the critical resistance level of $0.286. This level has proven tough to break, and if the token fails to push through, it may trigger a short-term pullback toward the $0.275 level.

However, a decline below this support is unlikely due to the large demand zone sitting just beneath. As long as TRX remains above $0.276, any correction is expected to be relatively mild.

On the flip side, if the broader market continues its upward momentum and TRX manages to break through the $0.286 resistance, the token could target $0.290 next. A move above this level would invalidate current bearish concerns and set the stage for another leg higher.