Tron [TRX]: Technical barriers to consider before taking a long position
Disclaimer: The findings of the following analysis are the sole opinion of the writer and should not be considered investment advice.
As predicted by a previous article, Tron [TRX] reversed from its falling wedge-like structure before returning to a bearish clutch. For more than eight weeks, the sellers have been trying to break the $0.063 support (currently resistance).
The recent drop below this level has positioned TRX below its 20/50 EMA to depict a bearish edge.
With the bulls maintaining the one-week (white) trendline support in the $0.062 region, TRX may now enter a rather slow phase. At the time of writing, TRX is trading at $0.06277.
TRX . 4-hour chart
This altcoin has seen an expected pullback after taking away an eighth from the 50 EMA (cyan) during a falling wedge breakout rally its. This reversal, coupled with the market sentiment, resulted in a significant blow for the TRX bulls as they failed to defend the $0.063 level.
With the 20 EMA (red) and the 50 EMA (cyan) still pointing south, sellers will continue to maintain their short-term advantage on the chart. A convincing close below the trendline support will only confirm this story.
After a break of two classic bottoms, the trendline's two-week resistance (white, dashed) capped buying attempts and recreated bearish pressure. Accordingly, TRX may aim to find a basis for a recovery from the $0.0623 basis. In general, a break above the $0.063 resistance could shift the short-term view in favor of the bulls. Here, the trendline resistance (broken line) can create hurdles to the recovery in the $0.064 area. Failure to do this could trigger further price drops. A close below the $0.062 basis could lead TRX to retest the $0.0614 mark.
Rationale
The Relative Strength Index (RSI) is compressed in the 41-50 range. Buyers should look for a potential close above the balance before taking a long position.
Interestingly, the CMF has risen above zero to depict a growing buying advantage. However, a convincing crossover on the MACD is still required to confirm the increased bullish strength.
Conclusion
TRX's close below the 20/50 EMA after losing $0.063 has repositioned the coin into a logical downtrend. To invalidate the downtrend, buyers must reconfirm the upper level and push the price above the two-week resistance of the trendline. The goals will remain the same as discussed.
Finally, investors/traders should consider Bitcoin's movement and its impact on broader market perception in order to make a profitable move.
Sep 04, 2022
