TRX, the digital token of the Tron Network, has emerged as one of the most popular digital assets of the year and is currently the eleventh largest cryptocurrency measured by market capitalization.
In the following chart analysis, we will look at the technicals of TRX/USD and highlight what they are saying about where the price of TRX may go next. We will look at the time period from October 15 to November 1 and use price data from Bitfinex.
The Trend is Downwards
As the trendlines in the above chart indicate, the price of TRX/USD has been trending downwards since mid-October.
In the 17-day time period, the price of TRX almost touched the lower trendline five times while it only managed to almost break out of the upper trendline on two occasions on October 27 and 29. This suggests that has been more downward than upward pressure on the price in the past two and a half weeks.
To close out the month, the price has moved back up towards the upper trendline, which suggests that the price is attempting to break out of the trend. Should the price breach the trendline in the coming days and manage to maintain above the trendline, then a trend reversal could occur and we could see a rally in early November. However, as it has failed to do so on November 1 - on the back off high trading volumes - this currently looks rather unlikely.
TRX Struggles to Break Through Resistance
Looking at support and resistance levels for TRX, it becomes apparent that TRX is struggling to reverse its recent downward trend.
While TRX managed to bounce off the 0.023439 price level (blue line) on several occasions between October 23 and October 28, on October 29 the price broke through this support level. This created a new support level at 0.022 (orange line).
On October 29 and 30, the price of TRX managed to maintain above its new support level of 0.022 but also did not manage to break out of its new resistance level at 0.02249 (green line), which suggests that the TRX bulls are not buying as much as they would need to to see a reversal of TRX’s two-week downward trend.
On November 1, the price of TRX tried to break its new resistance line at 0.02249 but failed to do so on several occasions creating a new, low-volatility price corridor between 0.022 and 0.02249.
Trending Lower Says MACD
Looking at the Moving Average Convergence Divergence (MACD) indicator, we can see that the MACD line has crossed the signal line from top to bottom and is on its way to cross the centreline downwards. These are both sell signals and suggest a continuance of TRX two-week downward trend.
Should the MACD line breach the centreline and head lower in the coming days, that would confirm the downtrend and would make the sell signal stronger.
RSI Gives No Clear Indication
Looking at the Relative Strength Index, we can see that TRX is currently neither heavily overbought nor oversold. In this instance, the RSI is not giving us much information as to where the price of TRX may go to next.
October has not been a great month for the price of TRX. TRX experienced two price spikes but closed the month effectively unchanged on the back of downward momentum. This despite the launch of its Tron Virtual Machine (TVM) and the announcement of a partnership with Baidu.
Starting November, technicals are giving us a bleak picture for the coming days. Trendlines and support & resistance levels are telling us that TRX is struggling to reverse its current downward trend, which would suggest a continuance towards new one-month low. Moreover, the MACD is suggesting that more downward price movement could be around the corner. The RSI is neutral at this point and thus gives no real indication of where the price could go next.
Judging purely by the technicals, therefore, it is best to refrain from buying TRX or adding to an existing TRX position. If anything, for TRX holders it may be a good time to sell some of the holdings for other digital assets that have a more positive moment at this point, and re-enter into TRX once its downward trend has shown clear signs of reversal.