ONDO's 20% Surge: Breakout or Bear Trap?
ONDO experienced a significant price surge of 20% on Wednesday, breaking out of a two-month descending channel. While this sparked optimism among bulls, a cautious approach remains warranted. Let's analyze the situation:
ONDO Price Breakout Analysis
The breakout was accompanied by above-average trading volume, a positive sign for bulls. However, the overall market structure on the 1-day chart remains bearish. A key resistance level sits at $0.915 (the 78.6% Fibonacci retracement level), representing a critical hurdle for sustained bullish momentum.
The On-Balance Volume (OBV) failed to create a new high, suggesting buyers may lack significant strength. The Relative Strength Index (RSI) stands at a neutral 50, hinting at a potential shift in momentum. This makes it crucial to look at further indicators to determine this surge is a solid rally or just a pump and dump.
Source: ONDO/USDT on TradingView
Buying Opportunities and Accumulation Trends
Despite the bearish market structure, some metrics suggest potential buying opportunities. IntoTheBlock data reveals two support zones around $0.815 and $0.791, situated above the descending channel's highs. A retest of these levels could present an attractive entry point for investors.
Source: IntoTheBlock
Santiment data shows a recent uptick in daily active addresses, indicating increased on-chain activity and potential demand. The 90-day mean coin age, while showing a minor dip in mid-March, continues to trend upwards, potentially suggesting accumulation. The 90-day MVRV ratio is negative, highlighting losses for short-to-medium-term holders.
Source: Santiment
Key Challenges and Cautions
While accumulation trends and the channel breakout are encouraging, it's crucial to remember the broader bearish market sentiment. The failure to surpass the key resistance at $0.915 and weak OBV indicate the need for caution. Investors should closely monitor these levels and other key indicators before making any significant investment decisions.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Investing in cryptocurrencies carries significant risk. Always conduct thorough research and consider your risk tolerance before investing.
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