Tron formed a head and shoulders pattern versus bitcoin but has yet to break below the neckline to confirm the downtrend. The neckline is located around 0.00000450 but there are signs of increased bearish pressure.
For one, the 100 SMA already crossed below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This means that the selloff is likely to persist. The moving averages might also hold as dynamic resistance levels on pullbacks.
Stochastic was previously on its way up but changed its mind halfway through to signal the presence of bearish pressure. This might be enough for at least a test of the neckline, and a break lower could lead to a drop of the same height.
Tron is being watched with close interest leading up to its testnet launch, which will remove its dependence on the ethereum network. Creator Justin Sun has a big vision for this altcoin, seeing it as a way to decentralize the internet itself. After all, the sole purpose behind the development of this digital currency was to provide entertainment content to its users without the intervention of popular websites or search engines.
Meanwhile, bitcoin has drawn some support so far this month as a few bullish signals have materialized on the BTC/USD chart. Risk appetite has also returned to the financial markets on Tuesday as geopolitical risks and trade war fears eased.
Keep in mind, however, that trade tensions between the US and China are still in play and could bring risk aversion back to the table anytime this week. The US government will release its list of Chinese companies that need to pay higher tariffs while China has already printed their list of US products to impose higher duties on.
Molly Jane is a Russian Literature major from California with a background in writing. She joins CurrencyTimes after working as a freelance journalist and blogger.