Technical Analysis and Market Entry: Tron Price Is Shaping Up for Another Potential Fall

TRON
  • Tron’s price is stuck within a stubborn bearish trend, displaying little signs of a slowdown.
  • TRX/USD price action has formed a bearish flag pattern, subject to a potential breakout south. 

TRX/USD: Recent Price Behavior 

The Tron price has come under continued attack from the market bears, showing no remorse in this prolonged period of selling. TRX/USD has been falling for the past five weeks, a drop of 60% in the last ten weeks, highlighting the intensity of this current downward trend. It is the worst run of losses seen since June 2018.

The price is again moving within consolidation mode, ranging, which makes it vulnerable to another wave of selling. Most recently, between 26 July to 7 August, TRX/USD formed a bearish flag structure during its sideways trading. The bears forced a breakout to the downside on 8 August, allowing for a deeper move south.

Another bearish flag is containing the price, which has been in play since 15 August. It is subject to potentially being exposed, which would invite the continued trend lower. The acting trend line below is seen tracking at $0.017000, which appears to be the last major support ahead of the 2018 low, $0.111600.

TRX can also be seen trading within a known area of demand, which runs from $0.019000 to the $0.016000 range. The price has not traded below this since 18 December 2018; it has previously proven to attract buyers. However, given the failure to make a push out from this territory, vulnerabilities are rising for this to be breached.

TRX/USD daily chart.

2019 Recovery Gains Given Back

On 13 August, TRX/USD gave back all of the gains that had been made for 2019. The price in January was trading at $0.02000 before running up into the $0.04000 territory in June. It was the highest level that had been observed since June 2018. The price formed a double top pattern from the highs seen on 2 and 25 June.

A trend line was supporting the price since the latter stages of November 2018, providing needed comfort for the bulls. Given the intensity of the move lower that began at the back end of June, the price fell through the trend line. TRX/USD completed a breakout and retest, which put the ball firmly in the bears’ court.

Trade Recommendation

Price behavior and the technical formation suggest that there is still room for another drop. In terms of targets; $0.015000 and then $0.011150, the low of 2018, are eyed. An entry within the current bearish flag/wedge structure is attractive, between the $0.018000-$0.017000 range. Stops would be placed just above at $0.020000, leaving enough breathing room. A daily breakout and closure above the detailed pattern would take the near-term short bias off the table.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.