Technical Analysis and Market Entry: TRX/USD Bearish Flag Breakout

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  • The Tron (TRX) price has been forced out of a bearish flag structure and retested, leaving the door open for further downside.
  • Tron will soon be rolling out its privacy feature, which will be optional for its users.

TRX/USD: Recent Price Behavior

The Tron price since the middle of May has failed to gain much momentum in either direction, following the strong bull run that had initially occurred in the month. TRX is very much in consolidation mode ahead of the next committed move, which is imminent.

TRX/USD daily chart.

TRX/USD on 13th May started to see an assertive run north after catching some buyer interest in proximity to a known demand zone. The area between $0.023000-$0.024000 has been known to support the price and assist the bulls.

The price gained around 37% between 13-15th May before the bulls started to lose ground, printing a high at the time of $0.03320. It was the highest print seen since 10th January, failing again in a proven troublesome area of supply. It has left TRX exposed again to further downside despite recently stabilizing.

Bearish Flag

Between 16-19th May, price action was within consolidation mode, which formed a bearish flag structure, as seen via the 4-hour chart. The bears forced a breakout to the downside on 19th, with a closure below.

TRX/USD 4-hour chart.

TRX/USD has since retested the pattern, completing a technical breakout and retest, which as a consequence leaves the price exposed. The resistance to the upside is observed at $0.02850, the lower acting trend line of the flag.

Tron Privacy Feature Awaited

Tron is said to be readying a security upgrade on its demo network. The development team at Tron is set to launch its latest privacy feature known as zk-SNARKs. It is expected to be integrated onto the Tron mainnet very soon, without specifics on time frame.

Recently Tron’s Founder Justin Sun disclosed information about the launch and promised that the feature will make Tron more secure. It is going to leverage the zero-knowledge proof method, allowing users to execute transactions without having to reveal any information to the entire network. Privacy coins Zcash and Monero have implemented zero proofs. With Tron, this feature is optional.

Sun noted:

zk-SNARKs are extremely important because they provide a new way for everyone to start using Tron with privacy protection. This is critical to lots of the crypto adopters in the industry.

Trade Recommendation

Given the breakout and retest of the flag structure, eyes are on the further potential downside. Near-term shorts are attractive, with an initial target of the lower demand zone, $0.02300-$0.02100. In terms of stops, they should be eyed just above the flag at $0.03000. A return back down to the noted price range above would be attractive again for buy positions near and long-term.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

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