Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
Justin Sun, the founder of TRON, announced the launch of USDD, a decentralized stablecoin on the TRON blockchain. The price of TRX climbed nearly 15% after Justin Sun tweeted the announcement. In the past few hours, the price retraced some of its gains.
TRX- 1 Hour Chart
Source: TRX/USDT on TradingView
In orange, from the $0.058 to $0.062, lies a range that TRX has been trading within for nearly two weeks. The previous day saw TRX climb past the range highs and flip the $0.062 level to support.
Combine this technical development with the timing of Justin Sun’s tweet and gains of 20% were seen as TRX shot upward from $0.062 to $0.075. Based on the move from $0.0618 to $0.075, a set of Fibonacci retracement levels (yellow) was drawn.
They showed the $0.066 to be the 61.8% retracement level. In general, the 61.8%-78.6% retracement levels are tested before the price resumes its prior trend. Hence, the $0.064-$0.066 area can be used to buy TRX, should the price revisit this area.
Rationale
Source: TRX/USDT on TradingView
The Awesome Oscillator and the RSI showed that the strong bullish momentum had weakened and come to nearly a standstill in the neutral area. However, the RSI was climbing back above the neutral 50 line at press time. The AO also stayed above the zero line.
The buying volume of the past couple of days has been large, and the CVD reflected this as it showed enormous buying pressure. At the time of writing, the pullback forced the CVD to show selling pressure.
Conclusion
The $0.064-$0.066 area could be a good place to look to enter long positions on TRX. However, Bitcoin is also likely to have an impact on TRX prices in the short term. Bitcoin faces some resistance at the $40.8k area, and TRX at the $0.069 mark. If they can climb past these levels, the next few hours of trading are likely to be bullish.
