Tron Price Forecast: TRX set for a correction as bearish momentum builds

Tron (TRX) price is flashing early signs of weakness, trading around $0.345 at the time of writing on Tuesday after breaking below its ascending trendline the previous day. This breakdown suggests a potential shift in market structure from bullish to bearish. On-chain and derivatives data also support a bearish outlook, coupled with weakening momentum indicators, which reinforces the likelihood of a further correction in the near term.

Tron’s on-chain and derivatives data hints at a correction 

CryptoQuant’s Spot Taker CVD for TRX is negative, and its value has been steadily rising since mid-August. This metric measures the cumulative difference between market buy and sell volumes over three months. When the three-month CVD is positive, it suggests the Taker Buy Dominant Phase. A negative value, as it is currently happening, indicates the Taker Sell Dominant Phase.

Tron Spot Taker CVD chart. Source: CryptoQuant

Coinglass’s funding rate data for TRX also support the bearish thesis. The metric has flipped to a negative rate on Tuesday and reads 0.0026%, indicating that shorts are paying longs. This scenario often signifies bearish sentiment in the market, suggesting potential downward pressure on TRX.

TRX OI-Weighted Funding Rate chart. Source: Coinglass

Tron Price Forecast: TRX breaks below key support 

Tron price faced rejection around its yearly high of $0.370 on Saturday and declined nearly 7% until Monday, closing below the ascending trendline (drawn by connecting multiple lows since June 22). At the time of writing, it hovers at around $0.345.

If TRX faces resistance around its daily level at $0.345 and continues its correction, it could extend the decline toward its 50-day Exponential Moving Average (EMA) at $0.330.

The Relative Strength Index (RSI) on the daily chart is hovering around its neutral level of 50, indicating indecisiveness among traders. For the bearish momentum to be sustained, the RSI must move below its neutral level. The Moving Average Convergence Divergence (MACD) showed a bearish crossover on Sunday, giving sell signals and suggesting a downward trend ahead.

TRX/USDT daily chart 

However, if TRX recovers and closes above its daily resistance at $0.345 on a daily basis, it could extend the recovery toward its yearly high at $0.370.