- TRON is a blockchain ecosystem that allows smart contracts and DApps.
- TRON may be a risky investment in the short term but may prove profitable in the long term.
- TRX needs to turn the resistance at the $0.06 Fibonacci level into support.
The crypto market continues to grow amid increasing volatility. While the overall market continues to gravitate toward the bulls, we can see that other cryptocurrencies are already losing their gains from the past months.
Interestingly, TRON has somehow been one of the cryptos that have experienced the latter. Prior to the DeFi boom, it was one of the top cryptocurrencies on coin listing sites such as CoinGecko and CoinMarketCap. However, many have overtaken it and there’s no telling when TRON may regain its former glory.
However, the reason for this is that many cryptocurrencies gained in market capitalization, while TRON remained comparatively stagnant. To be precise, TRON did not really experience a bear market; the overall market just gained too much in such a short period.
With this, let us take a closer look at TRON in this TRON technical analysis article. But for those who may not be one of the crypto OGs, let us have a little background about the subject.
What Is TRON?
Led by CEO Justin Sun, TRON is one of the most popular blockchain alternatives to Ethereum. In fact, it also made a foray into decentralized finance (DeFi), enabling liquidity protocols and borrowing/lending platforms.
Since 2020, TRON has been striving to catch up with Ethereum in terms of DeFi adoption. However, it seems to have been eclipsed by Binance Smart Chain, which is the flagship blockchain of prominent crypto exchange Binance.
Now that we know what is TRON, let us proceed to our TRON technical analysis.
TRON Technical Analysis
At the time of writing, TRX price is at $0.051332, according to CoinGecko. This is far from its all-time high (ATH) price of $0.23 back in January 2018.
For those who may recall, the crypto market ended its 2017 bull run somewhere between January and February 2018. If the price pattern of the market is similar to 2017’s, TRON may need to start worrying about its standing soon. But is it? Let’s head over to the charts.
Upon looking at the chart, we can see that a number of factors are at play. On the one hand, we see that TRX is beginning to recover its bullish position which it lost recently. On the other, we can observe that TRX has yet to stabilize its position at the support level at $0.05.
We can see that TRX has formed the Rising Wedge pattern, which is a bearish indicator. In ideal scenarios, the market should suffer an abrupt downtrend after the said pattern has emerged. In this case, we have yet to see if the market will respect this pattern and trade accordingly.
Nevertheless, we should never discount the strong support level at $0.05. As we can see, this support has proven durable for over a month. With this, bulls can expect enough backup for it to hit the $0.06 psychological resistance. However, this will only happen if the market defies the omen caused by the Rising Wedge pattern.
The RSI at 57 also shows that TRX is neither overbought nor oversold. In fact, we could almost say that TRX buyers and sellers are trading at an almost even pace.
TRX Long-Term Showing Bullish Possibilities
If we look at the TRON price in the long-term perspective, we can see that it has the potential to make a bullish case. Let’s expound in the chart below.
As the chart shows, the 50-day Simple Moving Average has a wide lead against the 200-day SMA. In fact, if we look a little further back in the chart, we can see that TRX performed a Golden Cross. This means that TRX has a good market ahead of itself in the next one or two months. That is if we are only playing safe.
For TRX to confirm its bullish stance, it has to hit the $0.06 Fibonacci level and turn it into support. Once this has been confirmed, TRX may reach the next Fib retracement level at $0.07.
However, TRX will need to watch out for any divergence ahead, especially a bearish divergence. While this has not been confirmed yet, traders will have to keep a close eye on the charts to protect their positions.
While this is a little far-fetched, TRON may actually hit $1 this 2021. This is because the crypto market is very volatile, and the price may move erratically when we least expect it.
While TRON may have created itself to become a competitor of Ethereum, it is not fair to compare them on the same scale. Each has its own unique offering.
TRON may be a risky investment in the short term, but it may become a profitable asset in the long term. However, traders need to do their own research and manage their risks well.
Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. No information in this article should be interpreted as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.