TRX offers bullish action, but buyers remain wary

Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

• The market structure and trend favored buyers on the 4-hour chart.
• Short-term bearish sentiment needs to change before bulls spend too much time chasing opportunities.

TRON [TRX] has been in a strong upward trend since the end of April. The move above the $0.068 level on the price charts boosted investor confidence. Although bitcoin [BTC] and the majority of the crypto market trended downwards in early May, TRX bulls did not deter.

Read TRONs [TRX] Price Forecast 2023-24

At the time of writing, both Bitcoin and Ethereum [ETH] had a bearish outlook on the 4-hour chart. Still, TRX showed signs of further gains. The news of TRON going live on Ethereum has boosted market sentiment.

TRON would move higher again despite market problems

Source: TRX/USDT on TradingView

On June 1, TRX broke below the latest higher low at $0.075, signaling bearish intent. But this move was quickly reversed as prices surged past the local highs of $0.08 to reach $0.0858. This underlined that the dip below $0.075 is a liquidity grab.

Therefore, at the time of writing, the market structure was strongly in favor of the bulls on the 4-hour time frame. When drawing Fibonacci retracement levels, we can see that the 78.6% level acted as support during the $0.0858 pullback.

The RSI has been below the neutral 50 for the past three days. It approached the neutral 50 level during the past 12 hours of trading, showing that bearish momentum was weakening, but not yet out of the picture when it went to press. The OBV has been rising slowly in recent days.

Bulls may be looking at long TRX around the $0.078-$0.08 area given the bullish structure. The uptrend was still in play and hence the price could climb higher to reach the 23.6% extension level at $0.0885. A fall below recent lows would break the structure and invalidate this idea.

The futures market hinted at a short-lived bearish sentiment

Source: Coin analysis

The increase of over $0.08 on June 3 was accompanied by a huge spike in Open Interest. This showed strong bullish sentiment in the market. Still, the funding rate was negative, suggesting that most of the market expected TRON to shut down and reverse.

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Since then, the funding rate has remained close to zero at the time of writing, with occasional dips into negative territory. Speculators could therefore hedge with short positions.

Since June 3, the OI has been in a downward trend, as has the price on the 1-hour chart. Therefore, cautious bulls may want to wait for this to change before looking at long TRX.