TRX offers bullish action, but buyers remain wary

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• The market structure and trend favored buyers on the 4-hour chart.
• The short-term bearish sentiment needs to change before bulls look for opportunities to long.

TRON [TRX] has been on a strong uptrend since late April. Its move above the $0.068 level on the price charts spurred investor confidence. Even though Bitcoin [BTC] and the majority of the crypto market trended downward in early May, it did not deter TRX bulls.

Read TRON’s [TRX] Price Prediction 2023-24

At the time of writing, both Bitcoin and Ethereum [ETH] had a bearish outlook on the 4-hour chart. Yet, TRX showed signs of posting further gains. The news of TRON going live on Ethereum boosted market sentiment.

TRON set to move higher again despite market woes

Source: TRX/USDT on TradingView

On 1 June, TRX broke below the latest higher low at $0.075, signaling bearish intent. But this move was quickly reversed as prices surged past the local highs at $0.08 to reach $0.0858. This underlined the dip below $0.075 to be a liquidity grab.

Therefore, at the time of writing, the market structure was strongly in favor of the bulls on the 4-hour timeframe. Upon drawing Fibonacci retracement levels, we can see that the 78.6% level acted as support during the pullback from $0.0858.

The RSI was below neutral 50 over the past three days. It neared the neutral 50 level over the past 12 hours of trading, showing that the bearish momentum was weakening but was not yet out of the picture at press time. The OBV has slowly climbed in recent days.

Bulls can look to long TRX around the $0.078-$0.08 area, given the bullish structure. The uptrend was still in play and hence the price could climb higher to reach the 23.6% extension level at $0.0885. A drop below the recent lows would break the structure and invalidate this idea.

The futures market hinted at a short-term bearish sentiment

Source: Coinalyze

The surge above $0.08 on 3 June was accompanied by a massive spike in Open Interest. This showed strong bullish sentiment in the market. Yet the funding rate was negative, which suggested most of the market expected TRON to halt and reverse.

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Since then, the funding rate remained close to zero at the time of writing, with occasional dips into negative territory. Thus, speculators could be hedging with short positions.

Since 3 June, the OI was in a downtrend, as was the price on the 1-hour chart. Hence, cautious bulls can wait for this to change before looking to long TRX.