Tron: Despite a Bearish October, TRX Could Be on the Verge of a Rebound

October has presented challenges for Tron (TRX) investors, showing a decline of approximately 11%. However, recent developments in reserves may indicate an impending rebound. With a rising reserve-to-borrow ratio and increasing market accumulation, TRX has the potential to rally if it can cross significant resistance levels.

Key Takeaways

The reserve-to-borrow ratio is climbing, suggesting more liquidity and reduced risk of overleveraging.
TRX needs to break through and maintain levels above the descending resistance line to signal a bullish trend.
Despite October's bearish trend, TRX shows signs of potential recovery thanks to increasing capital reserves.

Increasing Capital Reserves

The Tron ecosystem has experienced a notable growth in reserves lately. This increase is driven by investors opting to deposit more jTRX and jUSDT tokens—these are wrapped versions of TRX and USDT used for decentralized finance (DeFi) and lending activities. The rise in the reserve-to-borrow ratio indicates that more tokens are being added to reserves compared to what is being borrowed on the market.

jUSDT reserve to borrow ratio.

Market analyst Joao Wedson remarked that this trend seems to be cooling off overleveraged positions. He indicates that TRX might soon rally, stating, “Historically, this setup has marked the early phase of new TRX rallies.”

Rise in Accumulation

Even with the uptick in reserves, TRX has been experiencing weak sentiment on shorter timeframes. In the past day, TRX experienced a decline of around 1.24%, as retail investors sold approximately $2.22 million worth of the asset.

TRX spot exchange netflow.

Conversely, on a larger timeframe, CoinGlass data shows that spot investors have net accumulated about $11.21 million in TRX since October 27. The Accumulation/Distribution (A/D) indicator also reflects a positive trend, indicating that more accumulation is taking place, with current totals at approximately 122 billion TRX. This suggests a growing buying activity in the market.

TRX accumulation chart.

The ongoing accumulation points to a bullish sentiment, reinforcing the likelihood of a forthcoming rally.

Technical Analysis

TRX's potential for a rally is dependent on it successfully crossing above the descending resistance line noted in recent charts. This level has previously acted as a demand zone, suggesting that a breakout could catalyze a rally.

If TRX manages to secure a position above this resistance, it could target the $0.32 level, with projections indicating continued upward momentum potentially pushing the price to $0.35 and ultimately $0.37.

TRX price chart.

In summary, while October has been a challenging month for TRX, a number of market indicators suggest that a rebound could be on the horizon, especially if key resistance levels are surpassed.