Tron’s native cryptocurrency, TRX, has maintained a strong bullish momentum so far in 2024, enabling it to achieve impressive gains. However, TRX holders may face bearish conditions in the future. This expectation is based on the cryptocurrency’s 180-day Sharpe ratio. The latter has a high history of accuracy.
The Sharpe ratio recently spiked to high risk levels. Nonetheless, it points out that prices could still move higher, but prices above the current zone would carry greater downside risk.
TRX has been rising steadily and is up 120% year to date. In addition to this, it recently hit a new high of $0.224 on November 23. There has been some selling pressure since then, weakening the upward momentum. At press time, TRX is trading at $0.20.
TRX is down 10% from its recent highs to press time price levels. This may not necessarily mean that a strong wave of selling pressure is taking place.
TRX selling pressure
On-chain data shows that whale and institutional investor activity is decreasing. For example, inflows from large holders peaked at 2.13 billion TRX on November 16. Meanwhile, outflows from large holders were slightly higher at 2.16 billion TRX on the same day.
As of November 27, whale inflows have fallen to 205.77 million. On the same day, whale outflows also fell to 159.87 million, meaning net demand from whales was positive.
However, the figures also highlight a decline in demand from the whale and institutional classes.
Spot flows show that outflows from the TRX cryptocurrency have been significantly higher than inflows since mid-November.
Note that positive liquidity in cryptocurrencies was $5.27 million on Wednesday. On the derivatives side, open interest peaked at $160.25 million on November 24. This is much lower than the peak in August.
This month’s weak open interest confirms that derivatives demand for TRX has been weak. Especially relative to the peak of open interest during the last bull run.
Low open interest and declining whale demand may support the view of TRX selling pressure in the short term. However, the selling pressure that TRX has experienced most of the time is weak, paving the way for further gains.
This situation is likely to continue and drive more gains in the coming months.