TRON (TRX): A Pullback After a Huge Bullish Spike?

Over the past couple of days, literally, the entire cryptocurrency market has been going through the quickest and the most tangible dump it had in months, probably since the infamous coronavirus flash crash. Not that there are any parallels between these events, but it appears that the world is approaching the second wave of the pandemic, meaning that it could be March all over again if the cryptocurrency market, and the traditional one for that matter, won’t stabilize in the near future and get back to its bullish ways.

TRX defends its positions after striking $0.05

Nevertheless, while Bitcoin and the overwhelming majority of altcoins were in the freefall, TRON (TRX) has had a field day as the value of the 14th cryptocurrency soared above the last year’s high at $0.026 and even went on to touch the level at $0.05 with the upper wick on the weekly time frame, surprisingly making it arguably the only altcoin that was bullish on August 3, when the dump has been kicking into gear.

1-week TRX/USDT chart

In fact, TRX has performed a breakout out of the descending wedge formation and also crushed the macro resistance at $0.024 and retested it twice before flashing, perhaps, the largest green candle this market saw in months, the body of which began to shrink once the price touched $0.05. Obviously, the breakout has happened in a very inappropriate time; otherwise, this weekly candle would have closed significantly higher. Unfortunately, TRX got itself in a pickle here because potential buyers must be cautious about devoting money to any altcoin in the sliding market, while the bears continue to mount the pressure, trying to push the price below the resistance at $0.03 that would threaten the overall bullish narrative.

The indicators show that TRON is getting closer to falling into the bears’ claws, which would happen if the price drops below $0.024, thus rendering the breakout obsolete.

• MACD is still flowing in the bullish waters as it has already passed the resistance at 0.0026, but it’s approaching the point of reversal and the initiation of bearish crossover that would entail a substantial price depreciation, probably even to the support level at $0.019;
• Stochastic continues to move inside the rising channel, although it’s also heading downward right now, signaling about further price fall. Watch how the oscillator behaves near resistance at 35.43 - if it starts to curl back to the upside, look for an appropriate entry point. Otherwise, TRX is likely to head into a larger correction;
• The size of the red Kumo cloud of the Ichimoku Cloud indicators tells us of the underlying strength of resistance, so the bearish pressure is likely to rise in the following few days of price action. A pullback would send TRON back inside the cloud, a place where market participants must refrain from making any trades. However, both lagging span and a forward-looking momentum confirm the uptrend, so if TRX manages to stay above $0.024 and the Kumo cloud, a long position might be an option.

At the moment, everything depends on whether the market recovers swiftly after the all-encompassing dump. If so, TRX might go on a strong rally; otherwise, it would be dragged down by the bears.

Author: Alex Paulson for Crypto-Rating.com