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The short-term outlook for most cryptocurrencies was bleak, and even longer timeframes for Tron revealed that the bullish momentum behind recent gains had been neutralised. While a recovery is likely in the coming weeks, a Bitcoin surge could cause money to flow into BTC and out of alts.
Tron 12-hour chart
On the charts, a pullback was expected but a move of this magnitude and swiftness took many traders by surprise, judging by the $53.9 million worth of TRX contracts liquidated over the past 24 hours, 98% of them being long liquidations.
Two sets of Fibonacci retracement thresholds (yellow and white) were used, and their confluence at $0.125, which also served as a support area until the breakout to $0.17, makes this area critical for bulls to protect.
If bears take control of this field, the $0.109 stage will be the next to watch.
There is some indication that the latest decline was caused by uncertainty rather than TRX’s bearish sentiment, and that it mirrored the general market sentiment. Recovery may be rapid in the coming weeks, but this is also dependent on Bitcoin’s price action.
As rates dropped, open interest increased; but, on the charts, spot trading activity limped along at the average level. This explains why, despite falling rates, the OBV did not fall significantly. The OBV’s uptrend indicates strong purchasing volume behind its latest rally, and the last few hours do not yet indicate a significant turnaround on longer timeframes.
The discrepancy between price and momentum was present and pointed at a pullback from $0.165 to $0.14; however, this did not have to play out immediately—rallys will often begin to stretch higher even though signs point towards divergence.
The Stochastic RSI has dropped into the oversold zone, indicating recent selling pressure. The 50-year EMA (yellow)
Momentum has returned to neutral and on longer timeframes like the 12-hour, and the $0.12-$0.125 range is one for TRX bulls to defend. This could spark a TRX revival in the coming days, while a drop below $0.109 would take TRX to $0.109.