Tron has no doubt been one of the leading blockchains this year in terms of performance and TRX price has been enjoying the benefits. It has maintained an overall uptrend in 2024 with no signs of a possible slowdown. However, that may soon change courtesy of a recent CryptoQuant evaluation.
A CryptoQuant analyst by the name @joaowedson recently published a post which claims that TRX is in a risky zone. It was based on an evaluation of the cryptocurrency’s 180-day Sharpe ratio. The latter has historically been used to pinpoint potential tops in the market.
As per the recent analysis, TRX price recently pushed into a critical zone. It suggests that the risk of a sizable retracement within that zone is considerably high.
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The analysis also suggested that despite being in a risky area, TRX could still push higher before that eventual sizable pullback comes along. Speaking of, perhaps it might already be in play.
Is TRX Price Experiencing a Build-Up of Sell Pressure?
This week TRX price experienced its biggest pullback since July. This was after it recently achieved a new historic high at $0.224 on 23 November. This price point represented a 121% gain from its lowest price point in 2024.
TRX traded at $0.2035 at press time which was a 9.42% dip from its recent top which also happens to be its ATH. The extent of the dip as well as its rapid pace suggests that this could be the start of the sell pressure underscored by the 180-day Sharpe ratio.
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It is also worth noting that the pullback occurred after a bearish divergence pattern with the RSI. TRX’s Money Flow indicator also indicated a significant surge in outflows.
Here’s how TRX demand is fairing
TRX open interest peaked at $160.25 million on 24 November and this was its highest point during the month. This was notably lower than its peak in August which was the cryptocurrency’s highest level of open interest.
This confirmed that demand for TRX in the derivatives segment was relatively weak in November. Spot inflows vs outflows data also revealed that outflows have been significantly high during the month despite the price upside.
Despite these observations, outflows did not disclose signs of major sell pressure or heavy profit-taking. Nevertheless, large holder data confirmed that there was a considerable pullback of whale and institutional activity.
Tron Network activity in November
The Tron network maintained healthy activity in November. Its highest single day volume was recorded at $158 million on 12 November. However, this was notably lower than the peak volume that the network achieved in August.
Tron’s TVL peaked at $7.58 billion in November. However, this peak was still lower than the $10.51 billion peak it achieved in March.
The TVL and volume performance were in tune with the observations related to demand in the spot and derivatives segment. In other words, TRX and Tron performance was relatively weak in November. Especially considering that some of its rivals have been rallying heavily during the same month.
These observations do not necessarily indicate that TRX is building up momentum. Nevertheless, they may explain why interest from whales has been declining.
