Bitcoin has been returning to the $ 50,000 zone in the past few days but has not yet had enough momentum to return to the local peak of $ 53,600. A rejection of Bitcoin would cause some altcoins like Tron (TRX) to make lower highs and keep falling.

TRX has formed a falling wedge but is still under significant selling pressure as it drops to $ 0.077. When the price slid to $ 0.075 it was quickly absorbed, but it remains to be seen whether the bulls can break through.

Source: TradingView

The Fibonacci retracement tool is used to plot significant levels of resistance on the 12 hour chart based on the TRX movement from $ 0.18 to $ 0.046 between April and June of this year. As of August, the TRX price has stayed above the 23.6% retracement at $ 0.077.

In addition, the area of ​​$ 0.082 (red box) is also identified as a supply zone with dense sell orders. The price has fallen below this zone in the past few days and it could test it again as a resistance and then continue to fall as it did last month.

However, the formation of a falling wedge along with a defense of $ 0.077 could cause TRX to test the $ 0.09 and $ 0.097 levels in the coming weeks.

Theoretical basis

Source: TradingView

The monthly Chaikin Money Flow (CMF) has been making lower highs on the 12-hour chart since July, meaning that significant buying has risen at the $ 0.082 and $ 0.077 levels.

Although the RSI failed to break the trend line resistance (pink), it did not fall below 35. Therefore, as long as the area holds, price movement is expected.

If the wedge pattern breaks out, the TRX price could also experience a breakout in the RSI. However, the supply zone at $ 0.082, which coincides with the upper trendline of the wedge, reinforced the idea of ​​stiff resistance. The volume of the solid area shows a control point (POC, red) at $ 0.10, which is also a strong resistance.

If Bitcoin’s dominance drops below 40.4% and Ethereum breaks the USD 4,100 and USD 4,500 levels, a market-wide altcoin rally is possible. This could change the long-term sentiment for coins like TRX.

However, by the time TRX can break out of the wedge and break the $ 0.082 supply zone, sellers will have the upper hand.

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page