On October 11, the total market capitalization of the cryptocurrencies plunged below $200 billion for the first time since September 20, as a global risk-off trade led investors to dump their holdings. However, the encouraging sign is that the sell-off was short-lived and most currencies are trying to claw back.
The next week is critical because it will provide insight on whether the currencies will break down of their key supports or rise above their overhead resistances. A breakdown to new lows will be negative and might signal the extension of the ongoing bear market. On the other hand, if the bulls succeed in scaling the key levels, it will signal a likely bottom and might attract buying.
Let’s take a look at the top 5 performers of the week and their medium-term outlook.
Among the digital currencies that have a market capitalization of more than $1 billion, TRON is the only one that has managed to stay in the green in the past seven days. Two news stories attracted buyers in a range bound/falling market.
The first news that pushed prices higher was the tweet from Justin Sun, CEO of TRON on October 08. He said that the latest upgrade would make the digital currency “200x faster than Ethereum and cost 100x cheaper than EOS.”
The second news that led to higher prices was the tweet on October 12 that hinted at a partnership with an industry giant. So, can this fundamental news propel prices higher and should the investors buy now? Let’s study the charts and find out.
The TRX/USD pair topped out at $0.35013935 on January 05. At the current levels, the price is down about 93 percent from the highs. Since August 14, it has stopped falling and is trying to form a range. Such a consolidation shows that the owners of the digital currency are in no hurry to sell their holdings. Additionally, the investors are buying on dips, close to $0.0183.
The range has seen two touches at the top and two at the bottom. If the bulls break out and sustain above the range, it will indicate the probable start of a new uptrend. The first pattern target is $0.03801042. However, when the breakout happens after a large consolidation, it easily overshoots the minimum pattern target. Therefore, in the medium-term, investors can expect a move to $0.0415 followed by a rally to $0.052.
If the bears sink prices below $0.01587681, the downtrend will resume. Therefore, we suggest traders wait for a confirmed breakout and only then initiate a long position.