Tron (TRX) Shows Signs of Life, but 45% Decline Still a Challenge

Key Takeaways

• With rising RSI reading, TRX price has climbed to $0.24 after an initial sub-$0.20 scare.
• Despite that, the altcoin seems to have hit a crucial resistance that could halt the uptrend.
• If sustained, the negative AO reading could validate a reversal in TRX’s recent movement.

After falling to $0.20 earlier in the month, Tron’s (TRX) price has been able to bounce back to $0.24. Despite this hike, it could face challenges as it attempts to recover fully from the losses since December.

In December, TRX’s price hit an all-time high of $0.44. But today, the altcoin is down 45% from that peak. This decline happened due to profit-taking, low trading volume, and demand in the market.

Even though some of these have picked up lately, the broader market sentiment might continue to weigh heavily on its performance. As a result, TRX could find it difficult to overcome the challenges ahead.

Tron Price Claws Back from Local Low

Based on the 4-hour chart, TRX’s price was able to rebound to $0.24 due to renewed bullish momentum. CCN noticed this after the Relative Strength Index (RSI) crossed above the 50.00 neutral region on Feb. 16.

The RSI uses the speed and size of price changes to measure momentum. When the reading is positive, the momentum is bullish, and the price is likely to increase

Meanwhile, a negative reading indicates bearish momentum, which usually precedes or extends a price decrease. However, despite the rise in the RSI rating, the red line of the Supertrend indicator sits above TRX’s price.

The Supertrend tells whether an asset is in a downtrend or uptrend. Usually, when the green segment is below the price, it indicates support, and the cryptocurrency is in an uptrend.

Thus, the position, as seen above, indicates that TRX has faced resistance and presented a sell signal. As such, the uptrend could be coming an end.

Bearish Divergence Could Prevent TRX from Breaching Resistance

Beyond that, the daily chart shows that the cryptocurrency has reached the upper level of the descending channel. With increasing buying pressure, TRX could break the channel’s ceiling and trade higher.

However, that is unlikely to happen as the Awesome Oscillator (AO) shows the chances of a bearish reversal looks higher. The AO compares recent price changes to historic movements to measure momentum.

When the AO reading is positive, momentum is bullish. But as shown below, the AO reading is the negative region, indicating a bearish divergence.

If this momentum remains bearish, then Tron’s price might find it challenging to break the upper level resistance positioned at the 0.382 Fibonacci level. In that scenario, the value could retrace below the $0.236 Fib level, potentially sliding below $0.20 again.

If demand for the cryptocurrency completely fades, the price could drop to $0.16. However, if TRX sees an increase in buying pressure, the upswing might continue.

Should that be the case, the price could climb to the 0.618 golden ratio at $0.34. But for that to happen, the 0.27 and $0.30 region might play key roles.

Failure to rise higher than these zones could validate the bearish thesis while a break above them could send TRX price to the aforementioned bullish target.