tron trx logo 750x500 - TRON TRX Price Technical Analysis — October

TRON TRX Price Technical Analysis — October

TRX/USD is trading well below its breakout highs and was also affected mildly by the sell-off in the major cryptocurrencies which took place on Monday October 29. What is the expected outlook for Ripple as we head into the last two months of the year?

Fundamental Outlook

TRON is experiencing a growth in its ecosystem, driven by the operations of 7 decentralized applications on its network. One of these dApps, Tronbet, has exceeded 1 billion TRX in winning payouts in less than 2 weeks, according to a tweet by TRON co-founder Justin Sun. With 180,000 transactions so far, Tronbet accounts for a fifth of total transaction volume on the TRON Mainnet.

The addition of more dApps to the TRON network will increase the adoption and usage of the TRON Mainnet, and this could potentially threaten the number one position that the Ethereum network currently has in the dApps ecosystem.

This news is expected to have an impact on TRX/USD prices in the medium to long term.

Technical Outlook

TRX/USD is currently trading at the $0.0225 mark, which is a price level that is contained within the descending triangle setup seen on the weekly chart. Price is currently testing this area, which is at a price level of very near 45 cents as seen in this weekly chart below.

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TRX/USD Weekly Chart: October 28, 2018

The key price levels on the weekly chart are:

  1. The immediate resistance seen at the $0.0278 mark. This price area corresponds to the previous resistance early October 2018, and also the site where price previously found support in March and April 2018, prior to the role reversal that followed the downside break of the price support in August.
  2. The next support level on the long-term chart is at the $0.017994 price area.
  3. A descending resistance line which connects the price highs dating back to July 2018 is expected to meet the long-term support sometime in the future to complete the triangle trendline convergence.

These areas represent the key price levels on the long-term chart. In between these price levels, there are other minor resistance and support areas, which are best visualized on the medium term chart. The daily chart below reveals the following:

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Daily Chart for TRX/USD: October 31, 2018

  1. There is a horizontal resistance line which corresponds to the same line seen on the long term chart at $0.027843.
  2. The long term support line at $0.017994 is also visible here.
  3. In between these long term key levels, there is a medium-term support located at the $0.0265 price area, just below the current market price of TRX/USD.

With the information on the weekly and daily chart, what can we say about the TRX/USD pair going forward?

Trade Scenario 1

The active price action candle on the daily chart is trending downwards and is expected to make a test of the medium-term support level seen on the daily chart at $0.0265. This move is expected to come on the back of the bearish sentiment that hit the cryptocurrency market at the start of the week. This price level is expected to be tested several times. If it holds firm, then prices will trade within the medium-term range formed by this support level and the resistance seen at $0.0278. A break of this support level will lead to price making a push towards the long term support at $0.01799. This is a move which will, however, take several weeks to play out.

Trade Scenario 2

The next scenario considers the long-term outlook. This outlook considers the price behavior within the context of the evolving triangle pattern. Price action is expected to trade within the borders of the triangle until it resolves in the future as price approaches the apex. Therefore, it is expected that price will trade between the long-term horizontal support at $0.01799 and the descending trendline resistance, which has dynamic resistance levels because of its diagonal orientation.

If the descending triangle resolves as expected, then price is expected to break below the long term support sometime in the future.

Trade Scenario 3

Positive market outlook which will lead to a rise in prices of Bitcoin will drag the prices of other cryptos upward, and TRON may benefit from such price movements. This news-based price movement will negate all technical plays outlined above. But until such news hits the market, this scenario is unlikely to play out.

Market Sentiment:

The long term, mid-term and mid-term outlook of the TRX/USD pair is:

  • Long Term – neutral
  • Mid-term – potentially bullish

Disclaimer

Please note: this analysis was done on a weekly chart. It takes a whole week for a candle to form, so these moves may take several weeks to play out. Entries should be made on shorter time frame charts such as the daily chart.

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