Key Takeaways
What is the primary bullish signal for a potential TRX rally?
A climbing reserve-to-borrow ratio, indicating increased liquidity and lower overleveraged risk.
What is the key technical condition for TRX to achieve its price targets?
TRX must successfully cross and hold above the descending resistance line on the chart.
October has been a bearish month for Tron [TRX] investors so far, with the asset recording an overall performance decline of about 11% within the period.
While distribution continues, the broader outlook suggests that TRX could be preparing for a rebound as capital reserves continue to pave the way.
Reserve hike
There has been a significant increase in reserves available within the Tron ecosystem.
This growth stems from investors depositing more jTRX and jUSDT tokens—wrapped versions of TRX and USDT—used for DeFi and lending purposes.
Notably, the reserve-to-borrow ratio has continued to rise, implying that more tokens are available compared to the amount being borrowed in the market.
Source: Alphractal
Market analyst Joao Wedson noted that this trend has cooled off overleveraged players. According to his analysis, TRX could rally anytime soon, because,
“Historically, this setup has marked the early phase of new TRX rallies.”
Accumulation on the rise
Despite the recent increase in reserves, TRX still reflects weak sentiment on lower timeframes.
In the past 24 hours, the asset has seen a pullback of about 1.24%, as spot retail investors sold off approximately $2.22 million worth of TRX.
Source: CoinGlass
It’s a much different case on the higher timeframe. According to CoinGlass data, spot investors have recorded a net accumulation totaling $11.21 million worth of TRX since the start of the week on October 27.
The Accumulation/Distribution (A/D) indicator paints a similar outlook on the chart. At the moment, there is more accumulation taking place in the market.
Total accumulation currently stands at around 122 billion TRX, attesting to the fact that more buying activity is underway across the market.
Source: TradingView
This broad accumulation implies that the overall outlook continues to stay bullish, strengthening the tendency that a rally is likely to happen soon.
Technical outlook
TRX’s potential for a rally is hinged on its ability to cross above the descending resistance line on the chart.
This level has acted as a demand zone on several occasions, implying that it could trigger a rally from this point if successfully breached.
A confirmed breakout above this descending resistance could take TRX to the $0.32 target level on the chart.
Sustained momentum could further drive the asset toward $0.35 and eventually $0.37, according to market projections.
Source: TradingView
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