Tron (TRX/USD) has entered a corrective phase after completing an impressive rally that propelled the cryptocurrency to a peak of $0.28 in early May.
Currently trading around $0.26, TRX is attempting to find stability between the 38.2% Fibonacci retracement level at $0.26 and the 50% retracement level at $0.26196578, indicating a decision point that could determine the next move.
Interestingly enough, a doji candlestick is forming right on the 50% Fib as seen on the 4-hour time frame, suggesting that bulls and bears are battling it out for the time being. A confirmation candle closing above the high of this doji could confirm that buyers are regaining the upper hand.
Tron Rally Exhaustion
The price action on the chart reveals that Tron staged a strong breakout in early May after consolidating throughout April. This explosive upward movement saw TRX gain approximately 15% in value before encountering resistance and beginning to retrace.
The subsequent pullback appears to have found support at the key Fibonacci levels, with the 50% retracement currently providing a floor for the price action.
Tron has already tested the 50% level and is currently hovering slightly above it, suggesting that buyers are attempting to defend this zone. If this level fails to hold, the next significant support would be the 61.8% Fibonacci retracement at $0.25759414, which could serve as the last line of defense before a deeper correction might take place.
The long-term ascending trendline that has supported Tron since early April remains intact, confirming that the overall bullish structure hasn’t been compromised despite the recent pullback. This trendline, in combination with the 100% Fibonacci level at $0.24347102, forms a strong support confluence that should provide robust backing if the current retracement deepens further.
Potential Reversal Clues
The moving average alignment on the chart shows a constructive setup, with the blue 100 SMA positioned above the red 200 SMA. Both moving averages are trending upward, which typically signals a healthy uptrend.
Although TRX has pulled back, it still remains above both MAs, indicating underlying strength in the trend. The convergence of these moving averages with the ascending trendline, plus an earlier triangle bullish breakout, creates a significant support zone that bulls would need to defend to maintain the upward momentum.
The stochastic oscillator has moved lower from the overbought region and is currently trending downward, suggesting that bearish momentum is still in play for the short term. However, the oscillator is approaching the lower levels of its range, indicating that selling pressure may start to diminish soon. Traders should watch for a potential bullish crossover or a turn upward from current levels, which could signal a reversal and continuation of the broader uptrend.
The MACD indicator displayed in the middle panel shows the blue line has crossed below the orange signal line, confirming the bearish momentum in the near term. The histogram bars have turned negative, though their diminishing size in recent sessions suggests that selling pressure might be waning. This potential weakening of bearish momentum could set the stage for a bullish reversal if support levels hold firm.
