Analysis

TRON: Can this be the beginning of a downtrend?

The TRX move below the recent higher low at $0.074 on 9 June signified a break in the previously bullish market structure, and bears looked dominant on the daily timeframe.

Published

11 months ago

on

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • The break in market structure was followed by a strong lower low.
  • The $0.074-$0.078 area could be pivotal in determining the direction of the next move.

The US CPI rose 4% in May year-on-year, lower than April’s 4.9%. This boosted investor confidence that the Federal Reserve could pause its rate hikes. Experts suggested that the Fed could opt to stay put on the interest rates this month and keep the option of raising rates in June.

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The Dow Jones Index climbed 0.6% on Tuesday, 13 June, and the S&P 500 also posted gains. This could translate into gains for the crypto market, but Bitcoin was stuck beneath the $26.4k resistance. TRON also showed a bearish market structure on the higher timeframes.

Indicators showed a downtrend was initiated- should short sellers enter the market?

Source: TRX/USDT on TradingView

The RSI on the 1-day timeframe fell below neutral 50 to signal momentum had shifted in favor of the bears. The CMF was also below -0.05 to highlight significant capital flow out of the market. Together they showed a rise in bearish pressure in the market. Moreover, the Directional Movement Index also showed a strong downtrend in progress, with both the -DI (red) and ADX (yellow) above 20.

The price action on the daily timeframe showed bearish bias as well. The move below the recent higher low at $0.074 signified a break in the previously bullish market structure. What was more, TRX sellers were able to force prices beneath the $0.0668 mark as well. In doing so they brought the bearish intention of the market to the forefront.

It remains to be seen if this move downward is the beginning of a downtrend or only a particularly sharp correction. The evidence at hand pointed toward further downside. A revisit to the $0.074-$0.078 region can be used to short TRX.

The spot CVD suggested selling pressure has been intense for a while now

Source: Coinalyze

On 22 May, both the spot CVD and the Open Interest registered their highs for the month of May. Since then, both metrics have been falling. The CVD in particular was in a persistent downtrend, even though TRX pushed to the higher high at $0.085.

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The decline in OI hinted at bearish sentiment in the market and discouraged longs. Taken together with the price action, bearish intent could soon become a full-fledged higher timeframe downtrend. A TRON move above $0.078 would invalidate this idea.

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