Tron (TRX) Under Pressure: More Declines Expected Ahead of Nvidia Earnings

Tron (TRX) has shed most of the gains it secured after Jerome Powell’s dovish outlook at his Aug. 23 Jackson Hole speech. The layer-one blockchain asset has declined by circa 6.5% from its local top of around $0.169, the highest level since May 2021.

Why is Tron (TRX) Price Down Today?

It appears traders are securing profits ahead of the Nvidia earnings call at the closing bell of the New York session on Aug. 28, a sentiment visible across the crypto market.

Nvidia contributed 30% of the Nasdaq 100 index‘s overall gains in 2024. Since the index’s 30-day average correlation with the crypto market flipped to positive in August, any signs of distress in the US stock market are becoming more obvious for crypto assets, notwithstanding a top coin like Tron.

Another reason behind Tron’s decline today is its overbought status. On Aug. 20, the TRX/USD pair reached its most excessively bought levels in six months, as confirmed by its daily relative strength index (RSI) hitting 83.37, more than thirteen points above the overbought threshold of 70.

An overbought RSI typically prompts traders to secure profits, for they anticipate the asset has become too expensive to attract more buyers.

Will Tron Price Decline Further in August and September?

From a technical perspective, Tron’s ongoing price decline is part of a breakdown emerging from its prevailing rising wedge pattern.

The rising wedge is characterized by a contracting price range within two upward-sloping trendlines. As TRX’s price ascended within this structure, it hinted at weakening bullish momentum. This pattern typically resolves with a breakdown as the asset fails to sustain its upward trajectory.

As of Aug. 28, TRX was breaking below the wedge’s lower trendline to trade around $0.158. The breakdown move is accompanied by a surge in trading volume, further validating the bearish signal.

The pattern’s theoretical target is derived by measuring the distance between the wedge’s initial high and low points. This now suggests a decline toward $0.146 in August or early September.

This level aligns with the 200-period exponential moving average (EMA) on the four-hour chart, providing a potential short-term support area. If TRX fails to hold above this level, it could lead to more significant losses, potentially extending toward $0.135, a level that coincides with the support from earlier in August.

Is Tron Bullish or Bearish Long-Term?

The bearish technical setup occurs as the broader cryptocurrency market awaits the Federal Reserve’s interest rate decision after their Sept. 18 meeting. Bond traders see a 65.50% and 35.50% probability of a 25—and 50-basis-point (bps) rate cut, respectively.

Rate cuts are typically bullish for non-yielding, riskier assets like cryptocurrencies. Therefore, Tron may pursue a run-up toward its record high of $0.184 in the days leading up to the Fed rate decision, followed by a sell-the-news correction.

One may anticipate the TRX price consolidating inside the Fibonacci range of $0.153-0.184 before pursuing a decisive breakout—upside or downside. For instance, a high-volume breakout above $0.184 could cause TRX to eye a run-up toward $0.263 by year’s end.

Conversely, a break below the $0.153 support level could crash TRX’s price toward its 50-week exponential moving average (50-week EMA; the red wave in the chart above) at around $0.117.