Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
TRON has been on a downtrend in recent weeks, but for a brief moment, it appeared to have broken out of a wedge pattern. Yet, the move did not materialize. TRON faced rejection around a key area of resistance, shedding 7% of its value since.
Bitcoin Dominance was at 40.1 once more, an area from which it has bounced strongly in the past. Another such bounce would indicate altcoins losing strength compared to Bitcoin, meaning they would drop in value quicker than BTC should a significant move occur.
TRX – 4-hour chart
TRX formed a descending wedge pattern on the 4-hour chart over the past couple of weeks and appeared to break out of it. The price also tested the upper trendline and moved to the $0.081 area (red box) once more. However, the selling pressure was too much for the bulls to overcome.
The longer timeframe Fibonacci retracement levels (orange) have served as support and resistance and the $0.0779-level (23.6% retracement) was under duress once again. The shorter-term Fibonacci retracement levels (gray) showed the $0.081-level to be a resistance level.
In the coming days, if TRX goes below $0.075, it is likely that it would drop to the 27.2% and even the 61.8% extension levels at $0.067 and $0.058.
The OBV has been dropping steadily, confirming the downtrend the price has been on. Recently, the RSI has also struggled to stay above neutral 50 for a significant period of time. It was forced to drop to 35 once more after the rejection at $0.082.
The lower level highlighted on the OBV marked the lows formed on 20 December when the price hit $0.0748. An OBV drop below the lower level could signal a further move south.
On the price charts, the 21 SMA (orange) moved under the 55 SMA (green) and formed a bearish crossover to show bearish momentum was significant once more.
Over the next few days, it is likely that TRON would see further downside. Selling pressure has been strong and has been consistent over the past month.
Bullish strength was nowhere to be seen and Bitcoin was not looking particularly bullish either. The crypto king could force a sell-off in the altcoin market once again, like the intense selling seen in early December.