Tron (TRX) has defied the odds in August, emerging as a standout performer amidst a broader market downturn. Following the major stock and crypto market crash on August 5th, which saw Bitcoin (BTC) and Ethereum (ETH) experience their steepest daily drops since 2021, TRX has charted a swift price recovery.
While both BTC and ETH have shown modest rebounds, TRX has surged ahead, boasting a 22% gain in the past two weeks. This impressive rally even propelled TRX past Cardano (ADA) in market capitalization rankings on August 19th. CoinMarketCap data reveals a 7.58% increase in TRX’s market cap over the last 24 hours, reaching $12.9 billion at the time of writing. Additionally, trading activity has spiked, with a 142% increase in 24-hour trading volume to a staggering $791 million.
Profit Taking – A Potential Threat
Despite TRX trading significantly below its all-time high (currently 51% lower than its January 2018 peak), token holders are enjoying a profitable position. Data from IntoTheBlock suggests that nearly 98% of TRX holders are currently in profit, highlighting the token’s strong performance this year. In stark contrast, only 65% of Ethereum holders are experiencing gains at current prices, while a significant portion (94%) of Polygon (MATIC) holders sit on unrealized losses.
However, this overwhelming profitability across TRX addresses could pose a challenge to further price increases. Should holders decide to cash out and release a substantial volume of tokens into the market, selling pressure could mount and impede continued growth.
Whales and Retail Investors Lighten Up
Further analysis by IntoTheBlock reveals a potential shift in holdings across different investor segments. Data shows a decrease in holdings by both whales (1.58% in the last 30 days) and retail investors (0.24%) over the past month, suggesting some level of profit-taking across the board. This trend is further corroborated by a decrease in the aggregate amount of TRX held by addresses with significant holdings (1 million to 10 million TRX: -5.74% and 1 billion to 10 billion TRX: -3.56%).
Technical Analysis Hints at Continued Bullishness
Despite potential profit-taking concerns, technical indicators on the TRX price chart present a bullish picture across various timeframes. Notably, TRX is currently trading above its 20-, 50-, and 100-day simple moving averages (SMA) on hourly, 4-hourly, and daily charts, signifying a strong uptrend with the potential for further bullish momentum.
Also Read: Tether Going On A Spending Spree? $1B More USDT Minted On Tron
Furthermore, TRX successfully breached the $0.14 resistance level on August 19th, a key hurdle that had previously stalled its climb. A weekly close above this level could solidify this resistance as support, strengthening the resolve of bullish traders. Additionally, the daily chart presents a bullish ascending triangle pattern, suggesting a potential price target of $0.152 in the near term, with a possibility of challenging $0.155.
Tron (TRX) has defied expectations with its impressive post-crash recovery. However, questions remain regarding the sustainability of this momentum. Profit-taking by holders and a potential shift in investor behavior could pose challenges. Despite these concerns, technical indicators provide a bullish outlook, suggesting continued potential for price increases in the short term. Investors should closely monitor market developments and conduct their own research before making any investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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