Long Term Outlook for TRX/USD: August 30th, 2018
TRX/USD is considered by some as one of the crypto market’s more undervalued assets. Ever since the conclusion of its migration to its Mainnet, it has been one good piece of news for the asset after another. This news will no doubt, shore up positive fundamental outlook for TRON and will provide an opportunity for this crypto asset to take its true place in the market.
The latest news for TRON is its listing as a mode of payment on the CoinPayment platform. This has made the cryptocurrency available to use with 2.2 million merchants to pay for goods and services with this crypto. This move will serve to increase adoption of TRON going forward.
On the 30th of August, the official Tron Virtual Machine will be integrated into the TRON Mainnet, which will make it possible for developers to create decentralized applications (Dapps) on the network. These two events are positive for TRX, and we may see some of that positivity reflecting in the TRX/USD pair.
True technical analysis starts with the long-term outlook for the asset. For TRON, we look to the weekly chart for our analysis for the week. Unlike Bitcoin and Ethereum, Tron does not have much history on the weekly chart, having been launched in 2017. Therefore, we have basically a one-year history to analyze. The TRX/USD chart is shown below:
TRX/USD Weekly Chart: August 29, 2018
There are basically two key points to take away from this chart:
- The momentum indicator has formed two price troughs which are trending upwards. This is as the price action has formed two price troughs that are heading lower. This is a divergence signal.
- The shaded area at the descending support line reveals the presence of two pinbars. The price level here is at 0.021570. This price level also corresponds to the long term support level (red dotted line). We can see the pinbars sitting firmly on this support line.
There are two possible scenarios as to how this setup will eventually play out.
Putting all these points together, we see only one possible outcome for price action on TRX/USD: an upside reversal. This is on the basis of the bullish pinbars at the support line, as well as on the back of the divergence situation.
We would also notice that the momentum indicator formed the first trough in the oversold area, while the 2nd trough was unable to make it to the oversold area. This in technical analysis, is what we call the “failure swing”. It is a reversal signal, and this also adds credence to the expectation that the price of TRX/USD is expected to reverse upwards.
Possible Price Moves
So what would be the outlook for the TRX/USD pair moving forward?
A bullish reversal looks very likely. However, this is a weekly candle, so any true movements to be used for trade entries must be done off the hourly charts. It is likely that the next weekly candle may still have some downside movement in it, but this candle is not expected to close below the support trendline.
To the upside, any bullish rallies will have to contend with a firm resistance that stood its ground at the 0.040000 mark. So any long trades that are taken to follow the expected bullish price recovery will have to take this resistance area into consideration as a possible exit point. Traders with a bearish sentiment on TRX/USD will also be looking to use this area to sell on rallies.
The long-term, mid-term and short-term outlook of the TRX/USD pair is:
- Long-Term – Bearish (may change shortly)
- Mid-term – Bullish
- Short-term – Bullish
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.
This piece is for educational purposes only and should not be construed as a recommendation to buy or sell ETH at any price. The cryptocurrency markets are very volatile and require that the user is well-funded and has a good amount of trading experience.