Tokens representing Real World Assets (RWA) displayed impressive performance recently, with their collective market capitalization jumping from $51 billion to $63 billion in just one day. Among these RWA tokens, Ondo [ONDO] stood out as one of the top performers, witnessing a remarkable 37% surge to reach a trading price of $1.66.
On the 3rd of December, ONDO soared to an all-time high of $1.78, driven by a noticeable increase in buying activities. This upward momentum is evident in the token’s daily chart, where the Relative Strength Index (RSI) peaked at 84, signifying an overbought status.
Throughout early November, the RSI exhibited a gradual rise, indicating a consistent accumulation pattern by traders. Nevertheless, with the RSI now signaling an overbought condition, ONDO might experience a corrective pullback in the near future.
Moreover, the Average Directional Index (ADX) points upwards, suggesting a robust uptrend. This could potentially pave the way for ONDO to further extend its gains.
If ONDO continues its streak of setting new record highs, the next anticipated price target is the 1.618 Fibonacci level at $2.05.
Elevated Whale Activity
Following a temporary decline over the weekend, whale activity surrounding ONDO is surging once again. Data from IntoTheBlock indicates that large transactions above $100,000 surged by more than 200% within 24 hours, climbing from 13.73M to 42.28M.
Whales currently hold over 80% of ONDO’s circulating supply. Hence, any increased activity by these major holders could lead to heightened price volatility.
ONDO’s MVRV Ratio Reaches a 3-Month Peak
The Market Value to Realized Value (MVRV) ratio of ONDO has been steadily rising, hitting 7.06, its highest level in three months. This ratio signifies that the market value exceeds the realized value by a factor of seven, hinting at a potential overvaluation.
Despite the concerns around overvaluation, historical patterns suggest that a high MVRV ratio for ONDO typically aligns with bullish trends. Hence, the increasing ratio might indicate market confidence that could further support the ongoing uptrend.
Record High Open Interest
Another positive indicator for ONDO is the record-breaking open interest and heightened trading volumes in the derivatives market. Presently, open interest has soared to $285M after a remarkable 41% surge in a day.
The escalating open interest reflects a surge in newly established positions on ONDO, with trading volumes in the derivatives market spiking by over 400% according to Coinglass.
This trend not only signifies significant market participation but also promises to enhance liquidity levels.
Despite these optimistic signals, traders are advised to remain vigilant for potential signs of an overheated market, given the overbought RSI and the elevated MVRV ratio.