Following a peak of $2.1 about seven days ago, Ondo Finance [ONDO] has encountered challenges in sustaining an upward trend.
During this timeframe, the digital currency has declined to $1.47. Presently, at the time of drafting this article, ONDO was being traded at $1.51, indicating a 9.55% decrease within the last 24 hours. Moreover, the altcoin experienced a drop of 19.70% on a weekly basis.
The prevailing market conditions have sparked speculations within the cryptocurrency community about a potential further decline. Notably, prominent crypto analyst Ali Martinez has hinted at a possible drop to $1.05, referencing the head and shoulders pattern.
Community Sentiment Towards the Market
In his evaluation, Martinez pointed out that ONDO appeared to be forming a head and shoulders pattern currently. Therefore, if the altcoin concludes below $1.48, it could trigger a 30% price correction, pulling the value down to approximately $1.05.
For clarity, the head and shoulders pattern is a bearish signal that indicates a potential decline in price following an upward trend.
A price dip below the neckline suggests a potential decrease equivalent to the head’s height from the neckline.
Hence, ONDO must secure $1.86 as a support level to counteract the bearish projection. Failure to do so may result in a continued downtrend for the altcoin.
ONDO in Focus: Analyzing the Charts
Despite the bearish perspective presented earlier, it is crucial to explore what other market markers reveal.
As per CryptoCrypto’s analysis, ONDO was undergoing a corrective phase at the time of review, accompanied by prevalent bearish sentiments.
The bearish trend for ONDO is affirmed by the increasing balance of assets flowing to exchanges, illustrating heightened activity from traders gearing up to sell.
Moreover, a noticeable trend is observed among large holders, as per IntoTheBlock’s data, indicating a net outflow of -3.52 million among substantial investors.
This implies a higher volume of assets leaving the whale wallets than coming into them.
Furthermore, ONDO’s NVT ratio concerning transaction volume has surged recently, leading to concerns of potential overvaluation.
This trend signifies reduced engagement with the network, manifested through a decrease in transactions, active addresses, and general network utilization.
Lastly, the stock-to-flow ratio of the altcoin indicates an oversupply, backing the earlier observation of an increased inflow of assets to exchanges.
Given the oversupply situation with ONDO, there is a looming risk of further decline attributed to selling pressure.
If the existing market conditions persist, ONDO might discover support at approximately $1.04. Nevertheless, in the event of a reversal in trend, the altcoin could potentially regain the $1.7 mark in the near term.