- ONDO broke out of a two-month-long descending channel after posting 20% gains on Wednesday
- Metrics signaled a buying opportunity for market bulls, but investors should be cautious of the risks too
Ondo [ONDO] registered gains of 19.8% on Wednesday, and the trading volume for the day was also above average. This was encouraging for the market’s bulls. In fact, ONDO had formed a descending channel pattern (white) over the past two months, but saw a breakout beyond the highs during its most recent rally.
And yet, the market structure on the 1-day chart was still bearish.
Source: ONDO/USDT on TradingView
Technical analysis revealed that the 78.6% Fibonacci retracement level at $0.915 was still a key resistance level. It marked the lower high that ONDO needed to beat to shift the structure bullishly. The OBV did not make a new higher high, compared to March’s final week. This showed the buyers were not very strong. The RSI was at neutral 50, indicating a potential momentum shift.
Should traders trust the channel breakout and go long? Well, metrics showed there may be a buying opportunity at hand.
Buying opportunity for ONDO bulls as accumulation trends remain strong
The in/out of the money around price metric marked two nearby support zones for ONDO at $0.815 and $0.791. These were above the falling channel highs.
Therefore, a retest of these levels or the channel as support would offer a buying opportunity in the coming days.
The daily active addresses metric saw a severe decline from the second week of March. Over the past week, it has begun to climb higher once again. Rising on-chain activity can point towards a hike in usage and demand.
The 90-day mean coin age has been in a steady uptrend since January, with a minor drop in mid-March. The rising MCA could be a sign that coins were transacted less. At the same time, the ONDO dormant circulation metric saw few notable spikes in recent weeks.
Together, it pointeds toward accumulation. The 90-day MVRV ratio was also negative, showing that short to medium-term holders were facing losses.
The accumulation trends, alongside the breakout from the two-month channel, were an early sign that ONDO may be a decent buying opportunity. Still, investors must remain cautious given the market-wide bearish sentiment.
