Overview of Tron (TRX)
Tron is a blockchain-driven platform focused on entertainment content-sharing that has gained significant momentum in recent years, boasting millions of users and billions of transactions. It enables users to create content and applications without the need for centralized services, challenging the traditional media landscape, including industry giants such as Netflix and Amazon.
Furthermore, Tron allows creators to directly sell their content to consumers, creating benefits for both parties. The cryptocurrency that powers the Tron blockchain is called Tronix (TRX), which can be used to compensate content creators for access to their applications.
FTX Group Files for Chapter 11
Many cryptocurrencies, including TRX, faced significant selling pressure this past week as FTX Token (FTT), the digital asset linked to Sam Bankman-Fried’s FTX exchange, plummeted to its lowest value since February 2021 amid mounting concerns over the finances of Alameda Research, SBF’s hedge fund.
Last Friday, FTX announced its bankruptcy filing via Twitter. Sam Bankman-Fried resigned from his position as CEO, and FTX Group—which includes FTX.com, FTX US, Alameda Research, and approximately 130 associated entities—filed for Chapter 11. John Ray III succeeded Sam Bankman-Fried as CEO. John Ray stated:
“FTX Group has valuable assets that can only be effectively managed through an organized, coordinated process. We are committed to conducting this process with diligence, thoroughness, and transparency for all involved parties.”
The cryptocurrency market quickly erased nearly all its gains from Thursday following the bankruptcy news, and the risk of further declines remains. Salah-Eddine Bouhmidi, Head of Markets at I.G. Europe, suggested that Bitcoin’s price could drop to $13,500 by the end of the year, which would certainly push TRX to even lower levels since Bitcoin often sets the trend for the broader market.
On the positive side, weaker-than-expected core inflation readings—driven by a 0.4% drop in core goods prices—have improved sentiment in stock markets. The softening of inflation in October is certainly favorable news, and according to Bank of America, the U.S. Federal Reserve may ease its monetary policy.
The cooling inflation could encourage the Federal Reserve to adopt a less aggressive stance in its interest rate hikes, which has increased Bank of America’s confidence in a potential reduction to a 50 basis point rate hike in December.
Technical Analysis of Tron (TRX)
Tron (TRX) has declined from $0.065 to $0.052 since November 06, 2022, with the current price at $0.054. TRX may struggle to maintain levels above $0.050 in the coming days, and a break below this level could signal a further decline to around $0.040.
On the chart below, we observe that Tron (TRX) has been trading within a range of $0.050-$0.070 for some time. As long as TRX stays below $0.070, it remains within the SELL-ZONE.
Key Support & Resistance Levels for Tron (TRX)
From the March 2022 chart, I have highlighted critical support and resistance levels to assist traders in understanding potential price movements. Tron (TRX) remains under pressure, but if the price surpasses $0.065, the next resistance level could be at $0.070. The current support level is $0.050, and breaking below this would trigger a “SELL” signal, opening the way for a potential decline to $0.045. If the price falls below $0.040, which is a strong psychological support level, the next target could be around $0.030.
Factors Supporting an Increase in the Price of Tron (TRX)
Despite the ongoing challenges in the cryptocurrency market, exacerbated by the bankruptcy of FTX and the $8 billion liquidity gap left by Sam Bankman-Fried, Tron (TRX) remains under pressure. However, should the price rise above $0.065, the next target could be the resistance level at $0.070.
Indicators Suggesting Further Decline for Tron (TRX)
Tron (TRX) has lost more than 15% since November 06, dropping from $0.065 to a low of $0.052. The current price stands at $0.054, approximately 40% off from its May 2022 highs. Tron (TRX) may struggle to hold above the $0.050 mark in the coming days, and if this level is breached, TRX could potentially test the $0.040 range.
Disclaimer: Crypto assets are highly volatile and may not be suitable for all investors. Never invest money you cannot afford to lose. The information provided here is intended for educational purposes only and should not be construed as investment or financial advice.
