Following a strong surge in May, TRX price experienced a sharp drop of almost 10% over just three sessions, causing a shift in market sentiment. The decline was attributed to fresh uncertainty surrounding news related to Justin Sun, which coincided with traders gearing up for a breakout above $0.38. This sudden selloff raises the question of whether it is a necessary correction before another upward move or a warning signal that TRX’s rally is losing momentum.
The recent correction in TRX price seems to be a result of both profit-taking and negative sentiment stemming from developments linked to Justin Sun. Reports emerged indicating that the British government had sanctioned Sun’s exchange, HTX, over allegations of supporting Russian-linked activities, leading to increased uncertainty within the TRON ecosystem.
While this news doesn’t have a direct impact on the TRON blockchain, investors tend to react swiftly to ecosystem-related headlines. As Bitcoin cooled off from recent highs, traders shifted away from high-beta altcoins, including TRX, resulting in accelerated profit booking. This led to a significant retracement after weeks of strong gains.
Despite the recent decline, TRON’s price action appears to be more of a retest of the trend rather than a confirmed breakdown. The token had been trading within a strong ascending structure supported by a rising trendline and bullish higher lows since February. Additionally, TRX completed a double-bottom formation near the $0.27 region earlier in the year, fueling its recovery rally.
After being rejected near the $0.37–$0.38 supply zone, TRX is now revisiting a key support area around $0.34–$0.35. This level is crucial as it aligns with the previous breakout structure that triggered the recent uptrend and coincides with the ascending trendline that has been supporting price action. A successful defense of this level could stabilize TRX and set it up for another push towards $0.36 and potentially a retest of the $0.38 resistance zone.
If the support at $0.34 is breached, TRON could face further downside towards the $0.31–$0.32 area, where the 200-day moving average provides stronger support. Derivatives data indicates a cooling of speculative momentum following the recent selloff, with a decline in futures volume and open interest. Despite this, options volume has surged, suggesting traders are hedging volatility or positioning for future moves amid rising uncertainty.
TRON’s next move hinges on whether bulls can defend the $0.34 support zone to reset momentum for another attempt at recent highs. However, continued bearish pressure and negative sentiment surrounding Justin Sun could deepen the correction before buyers regain control. As TRON navigates this critical juncture, the outcome may determine its trajectory as June unfolds.
