Long-Term Outlook For TRON: September 25, 2018 – Tronix USD (Cryptocurrency:TRX-USD)

TRON (TRX-USD) is still considered an undervalued asset in the cryptocurrency market. The coin, as we’ve written, is designed to be a “token” of the new, de-centralized internet. Think of people sending it to one another to settle bills, but also as an in-game or in-app currency. It could be used to give small (think like a quarter of a penny) donations for an article or an infographic created online.

The team has been working hard to create value for the coin, looking for adoption avenues following the migration to its Mainnet. No doubt, the market is waiting on this asset to show whether it is worth investing in for the long term. Here is the long-term analysis for TRX/USD beginning on September 25, 2018.

Fundamental Outlook

TRX continues to ride on the positive news of the last few weeks. CEO Justin Sun seems to have taken his recent difference in opinion with Ethereum co-founder Vitalik Buterin to a whole new level. In a recent statement, he has requested developers of decentralized apps to take their work away from Ethereum and bring them to the TRON network. This has no doubt upped the stakes as to which network will become the preferred decentralized applications (dApps) network going forward.

With Sun throwing down the gauntlet, TRX will have to step up to the plate to deliver on its promises. So far, it seems to be moving in the right direction; seeing new trading pairs launched and early momentum in attracting these decentralized applications.

Technical Outlook

The long-term chart of TRX/USD as at September 19, 2018, is shown below:

TRX/USD Weekly Chart: September 19, 2018

Since the last technical analysis provided for this pair in August, a number of changes have been seen on the price chart which reinforce the belief from a technical perspective, that the price of TRX/USD is getting set for an upside breakout. Here are some takeaways from the chart shown:

  1. The price highs and price lows are each bounded by trendlines, which form a falling wedge pattern. This pattern usually resolves with a bullish breakout of price above the upper border of the wedge.
  2. A number of doji patterns have formed in the last two weeks of trading. A doji signifies indecision, but in a market which has generally been bearish, it is significant as it indicates that the selling pressure has waned significantly.
  3. The On Balance Volume indicator is presently turning downwards and may form a new trough.

The scenario expected to play out here is simple. If the 2nd trough being formed by the OBV indicator fails to reach oversold levels, it will form a “failure swing” pattern, showing progressively higher lows. There is still some space to accommodate further downside move of price to the lower wedge trendline. If this downside move occurs and stalls at the trendline while the OBV forms progressively higher lows, a divergence scenario would have occurred.

If the divergence occurs as described, then the price action will have enough reason to push upwards from the lower trendline border of the falling wedge and push upwards, at least to the opposing boundary. The price candle will then have to close above this upper trendline border for price to fully break out of the wedge. Positive news for TRX will help this move come to pass.

Trade Scenario

Fast forward a week, and TRX’s weekly candle actually broke above the upper trendline and closed above it. This is a long-term game changer.

Upside price correction of the divergence mentioned earlier is still very much on the cards. Following the breakout, the price of TRX/USD is expected to pull back to the broken trendline and bounce from there. This pullback is already happening, spurred by a weaker opening to the week by Bitcoin. This is because the trendline will perform a role reversal; from a resistance to a new support.

Possible Price Moves

So, what would be the outlook for the TRX/USD pair moving forward?

A bullish reversal is very much on the cards, with price having broken out of the falling wedge. Positive news will herald more upside movements. However, it is important to follow what is happening with Bitcoin and other cryptos, as the crypto market has revealed itself to be one of the most correlated markets.

Market Sentiment:

The long-term, mid-term and short-term outlook of the TRX/USD pair is:

  • Long-term – bullish (may change shortly)
  • Mid-term – bullish
  • Short term – neutral

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.

Disclosure: I am/we are long TRX-USD.

Business relationship disclosure: This article was written in partnership with an analyst; no one involved has any relationship with Tron.

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