close icon

Overbought TRON Can Tumble 30% Against Dollar

TRON became the 7th largest cryptocurrency by market cap following a 135% surge in the last month. It surpassed Litecoin and Stellar on its way up and is now within a striking distance of Tether in the sixth place.

TRXUSD’s recent performance can easily convince investors it is time to join the bulls. The problem with following bullish headlines though, it that they are not indicative of future results. The news simply informs you about what has already happened, which may differ significantly from what lies ahead.

So instead of extrapolating the past, let’s take a look at the 4-hour chart of TRON through an Elliott Wave perspective.

TRON cryptocurrency Elliott Wave setup

The 4h chart of TRXUSD reveals that the structure of the rally from 0.0111 to 0.0358 is impulsive. It can be labeled 1-2-3-4-5 and the sub-waves of wave 3 are also visible.

According to the Elliott Wave theory, a three-wave correction follows every impulse. This means that TRON has been in pullback mode since the top of wave 5 at 0.0358 on January 10th. The decline to 0.0212 must be wave A, suggesting the current recovery to 0.0312 so far is wave B.

If this is the correct count, wave C down can be expected to begin soon. As long as TRXUSD trades below 0.0358, the support area of wave 4 near 0.0180 looks like a reasonable bearish target.

Another reason not to trust the bulls is the RSI indicator, which shows TRON has reached overbought territory. The last three times that happened was near the highs of waves 1, 3 and 5. In all three cases, a pullback occurred shortly after.

In our opinion, this is not a good time to buy TRON. Crypto enthusiasts can see its market cap decline by over 30% soon. A plunge below 0.0200 seems to be lurking ahead.

Did you like this analysis? Our Elliott Wave Video Course can teach you how to uncover similar opportunities yourself!

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Litecoin Lost 50% in Two Months. Is the Pain Over?

Litecoin, the fifth largest cryptocurrency, lost more than half of its market value in the past two months. Between June 22nd and August 21st, LTCUSD fell from $146 to $70. Since crypto assets have no intrinsic value, investors often compare the current price to its higher level some time ago. This leads them to the…

Read More »

Ethereum Made a Decision the Bulls Won’t Like

A month and a half ago, Ethereum was hovering in the vicinity of $340 a coin. The bulls seemed unstoppable after lifting the price by over 320% in six months. Unfortunately, an invisible threat was brewing under the surface. Instead of simply extrapolating the recent uptrend into the future, we thought it appropriate to take…

Read More »

How Bitcoin Almost Collapsed Last Month

The price of Bitcoin returned above the $12 000 mark two days ago. As of this writing, the biggest cryptocurrency is still trading in the vicinity of $12k and the larger uptrend appears to be still in progress. Less than two weeks ago, things were not looking so rosy. BTCUSD was hovering around $9500 in…

Read More »

Ethereum Price to Face an Important Decision Soon

Bitcoin has been unstoppable in 2019 and the old “to the moon” chatter is getting louder and louder once again. Ethereum – the second biggest cryptocurrency – has been delivering generous returns since the start of the year, as well. ETHUSD, currently hovering around $343, is up 325% from its December 2018 low of $80.90.…

Read More »

Bitcoin Proves Traders Can Prepare without “Knowing”

The price of Bitcoin slightly breached the psychological level of $3500 yesterday and still has not been able to escape its gravity as of this writing. The current selloff brought back the memories of the time when BTCUSD fell to $3122 a month ago. And while in the markets everyone is an expert in retrospect,…

Read More »

Here is Why BTCUSD is Down 40% in Less than a Month

The price of Bitcoin is declining at an unprecedented speed. Less than a month ago, BTCUSD was hovering above $5500. Last week it fell to as low as $3210, prompting Peter Mallouk, chief investment officer at Creative Planning Inc., to call Bitcoin a “dead man walking”. However, the truth is it didn’t take a professional money manager…

Read More »

Bitcoin Was Going “to the Moon”… And Then It Wasn’t

What a difference a year can make. This time last year Bitcoin was thought to be going “to the moon” by a great majority of people. BTCUSD was approaching the $20 000 mark at the time and financial gurus, hedge fund managers, celebrities and small individual investors alike were rushing to join the bulls. Many…

Read More »

More analyses