Bearish pattern presents incoming buy opportunity

Tron’s initial reaction post a broader market sell-off on 3 December was quite impressive. The alt managed to post a 20% recovery between 6-8 December and flipped its near term SMA’s. Unfortunately, TRX’s price action has been quite disappointing since. Unable to clear past $0.09381-resistance, the next two weeks saw TRX negate all its gains and register a 20% decline back to $0.0768.

While Bitcoin’s latest triumph above $50K has helped alts with trading inflows, a rising wedge pattern can trigger yet another drawdown for TRX. Fortunately, this anticipated dip would present investors with a chance to grab TRX at cheaper price levels. At the time of writing, TRX traded at $0.0810, down by 1.6% over the last 24 hours.

Tron 4-hour time frame

Currently trading close to the lower trendline of its wedge, Tron’s value was upheld at the confluence of its 50-SMA (yellow) and 20-SMA (red). With these near-term moving averages supporting the price, TRX looked prime to revisit $0.08305 resistance over the coming sessions. However, the bearish pattern was vulnerable to a breakdown at the aforementioned barrier. A sell-off anywhere between 6%-12% could follow and drag TRX to support levels of $0.0781 or even $0.07310.

On the flip side, a close above $0.08305 on good volumes would invalidate these predictions. The lack of strong resistance levels above $0.08305 would see TRX close the gap to its 200-SMA (green) relatively quickly.

Indicators

TRX’s indicators were a bit of a mixed bag at press time. While the Relative Strength Index traded above 50 and offered aid to bullish traders, the MACD was close to a bearish crossover. Hence, the interaction of buyers and sellers at the 50-SMA (yellow) would offer more insights into TRX’s trajectory.

Conclusion

The formation of a rising wedge put Tron at risk of a breakdown. Those wishing to place buy trades must wait for the pattern to play out before entering the market. Aggressive entries can be made at $0.0781 while safer bets can be placed at $0.078 and $0.07488.