Is Tron Poised for a Breakout with a 180% Surge in Transactions?
Tron [TRX] stood out as the sole token among the top ten largest cryptocurrencies by market capitalization that wasn’t in the negative territory at the time of writing, showing a modest 1% increase. This uptick pushed TRX to trade at $0.156.
One of the contributing factors to this slight uptrend could be the surge in substantial transaction volumes.
According to data from IntoTheBlock, on October 7th, large TRX transaction volumes escalated from 224 million to 629 million, marking an impressive 180% surge.
The significant spike in transactions exceeding $100,000 signals heightened interest from whales in TRX. The question now remains: will these increased volumes have the potential to catapult TRX out of its consolidation phase?
Assessment of Tron’s Price Outlook
Since late September, TRX has been stuck in a consolidation phase, with its price fluctuating between $0.153 and $0.157.
The volume histogram bars indicate a struggle to break out of this consolidation phase, largely due to waning interest from both buyers and sellers.
The histogram bars have consistently hovered below the 50-day moving average since early September, underscoring the overall market inactivity.
Moreover, the flattened Moving Average Convergence Divergence (MACD) line against the signal line points to a lack of momentum. Traders seem to be holding back, awaiting a clear signal before committing to new trading positions on either side.
If trading volumes don’t witness a significant shift, TRX is likely to remain range-bound, with a potential uptrend encountering resistance at $0.157.
Insights from Open Interest and Funding Rates
Data from Coinglass reveals a substantial decline in Tron’s Open Interest, which currently stands at $86M – nearly a 50% drop since late August.
This plummeting Open Interest indicates dwindling market engagement, with fewer traders initiating and maintaining positions on TRX, signaling indecision and fatigue among both bulls and bears following the August rally.
However, a closer look at Funding Rates suggests that if TRX fails to breakout bullishly from the consolidation phase, bears could seize control of the price action.
Over the past week, there has been a surge in short positions on TRX, hinting at an anticipation of a bearish breakout from the current range-bound market.
Another factor contributing to the negative funding rates is a minor dip in the number of TRX wallets in profit.
According to IntoTheBlock, the percentage of wallets In the Money has slightly dropped from 97% to 95% in the previous seven days.
While this decline may seem modest, a further decrease in profitable wallets could lead to additional price drops as traders might opt to sell to mitigate losses.