- Large holders dumped TRX into the market, forcing a fall that could extend further
- Overall market structure seemed bullish as on-chain fees and other market sentiments hinted at positive activity
In the last 24 hours, TRX has seen a major market decline, one that led the asset to trade lower and fall by 2.77% on the charts. This, despite the positive trading activity it has seen over the past 3 weeks.
In fact, AMBCrypto’s analysis revealed that this market movement could be a two-way event. First of all, the asset will record a price decline, following which it will see a rally to the upside.
Here’s what induced the fall and where the price could head next on the charts.
Large traders force TRX to trend lower
TRX’s decline over the last 24 hours has been driven by large holders in the market holding a significant supply of the asset. This group, over this period, has sold a cumulative total of over 8.27 million TRX worth $2 million.
Source: IntoTheBlock
However, the decision to sell is a deliberate effort to reduce the risk of recording losses after gaining by 9.84% in the past few weeks of holding. Especially with the asset trading into a key resistance level on the Bollinger Bands chart.
The Bollinger Bands are a technical indicator consisting of three levels – The upper band (resistance), the lower band (support), and the middle band, which interacts between a resistance and support level.
Trading into the upper resistance tends to lead to a price decline historically. And, this scenario is likely no different. However, there may be two levels of interest – The mid-zone, which could potentially act as a support level at $0.2398 (A cushion and rebound level), and then the lower band support of $0.2246.
Source: TradingView
AMBCrypto used the Average Directional Index (ADX) to determine whether the downtrend is strong or weak, suggesting the latter to be the case.
With the ADX trending upwards, it implied that the prevailing price decline will extend and that TRX will continue to drop lower on the chart. Owing to the same, it could potentially go below the mid-level band.
Bullish environment remains intact
Despite the drop, however, the bullish environment in the market has remained intact. In fact, the Global In and Out of Money Around Price has maintained a level of positive sentiment in the market.
At the time of writing, over 84% of TRX holders were in profit. This tends to be an incentive for them to continue holding, even when the market drops.
Source: Artemis
Additionally, the TRON blockchain generated over $2.2 million in trading fees within the last 24 hours – The highest across all other blockchains. This implied there’s more activity going on in the chain and more users – A net positive.
For now, the overall market structure is bullish. This means the drop in price will likely be followed by a price rebound.
