Tron (TRX-USD)is exerting downward pressure on a key support level, as the gains that have been made by Bitcoin (BTC-USD) in the last week continue to depress the price of its altcoins pairings. What can traders expect as we head into the new week?

Fundamental Outlook

TRON continues to march on in its drive to supplant Ethereum as the go-to network for development of decentralized applications (dApps). It was reported a few hours prior to writing that the TRON mainnet has acquired 2.5 million accounts since the launch of the mainnet in June 2018.

The same news source indicated that TRON has surpassed Ethereum’s (ETH-USD) 7.5 million blocks by hitting just above 8.34 million blocks. However, these achievements are not expected to impact prices in the short and medium term, as BTC’s price moves seem to be more of the fundamental trigger for price action of the TRX/BTC pair.

Technical Outlook

The technical analysis for TRX/BTC starts on the weekly chart, where we can see that the weekly candle has breached the horizontal support at 0.00000528 BTC. Price is presently trading at 0.00000515, but needs to move a touch lower and close at that level to satisfy the 3% penetration benchmark needed to confirm a downside break.

TRX/BTC Weekly Chart: April 14, 2018

The 9EMA also is acting as a dynamic resistance to price action, and it can be seen above the price candles of the last 6 weeks, exerting its action as a resistance.

However, a look at the daily chart shows that price action is located around the support area previously identified, but with some important pointers:

  1. The volumes are gradually decreasing, which may be a sign that downward pressure has started to die off.
  2. The price candle for the last day of the week is mildly bullish, which has also served to negate the bearish market action that has been pervasive in the TRX/BTC pair.

Description: C:UsersPCDocumentsEric GrantStock_imagesNew folderApril2019_TRXBTC_dly.png

Daily Chart for TRX/BTC: April 13, 2019

With the information on the weekly and daily chart, what can we expect from the TRX/BTC pair going forward?

Trade Scenario 1

While it may be tempting to look at the breach of the support level on the daily chart, we have to be careful about concluding that prices look to be breaking south. In fact, it is possible that prices will stall at the support level and rebound off that level to the north. Support for this scenario comes from the fact that volumes are decreasing, which means that the volume necessary to support the continued downside move may have waned to a point where it can be said that the bears have tired. Also, BTC has taken a breather from its surge to the $5,400 mark against the US dollar. So unless we have another round of BTC bullishness against the US dollar, it would be hard to see further strengthening of BTC against TRX in the crypto market space.

Trade Scenario 2

This scenario will assume that the new week could bring further strength in Bitcoin, which will be enough to push prices below the support line with a 3% penetration factor. This will push prices down south and open the door for price to attempt to reach the next support level at 0.00000402.

Market Sentiment:

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

  • Long term – neutral
  • Mid term – neutral to bearish

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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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

(Excerpt) Read more Here | 2019-04-17 18:30:00
Image credit: source

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