ONDO Struggles to Reclaim $2 as Momentum Fades — Recovery Could Take Time

Key Takeaways

• After surging to $1.56, ONDO has fallen back to $1.20 amid significant resistance around $1.32.
• This resistance, with volume in unrealized losses, could exert downward pressure on the price.
• Technical indicators including the Supertrend and BBP reveal that ONDO’s decline might continue.

As CCN predicted, the aftermath of the Jan. 18 ONDO token unlock resulted in higher prices for the altcoin. Following that supply shock, ONDO’s price hit $1.56 for the first time since the first week of January.

However, the rally did not continue as ONDO’s price has retraced to $1.20, leaving the market divided over whether this dip is a temporary setback or the start of a prolonged correction. In this analysis, technical indicators reveal what could become of the token after this pullback.

Key Resistance Poses a Challenge to ONDO

According to the In/Out of Money Around Price (IOMAP), the major resistance for ONDO lies between $1.31. and $1.34.

For context, the IOMAP classifies addresses based on their profitability. With this data, one can spot resistance and support zones.

Typically, the higher the volume of tokens in unrealized gains, the stronger the support becomes as investors holding profitable positions are less inclined to sell. This provides a cushion against downward price pressure.

However, when a significant volume of tokens is in unrealized losses, that level can act as a key resistance. At these levels, traders facing potential losses may be more motivated to offload their positions once the price begins to recover

As seen above, over 4,000 ONDO addresses now collectively hold 185 million tokens, accumulated at an average price of $1.32. This figure surpasses the volumes purchased between $1.02 and $1.16.

Therefore, if the price of ONDO attempts to climb toward $1.32, these holders could exert significant selling pressure which could drive the price downwards.

ONDO Price Pullback Not Yet Over

On the technical side, the Supertrend on the daily ONDO/USD chart has risen above the altcoin’s price. When the red segment of the Supertrend is above the price, it represents a sell signal.

However, if the green line appears and is situated below the current price, it signals a buy opportunity. In the context of the analysis, the chart indicates that ONDO has yet to reach the ideal entry point.

Furthermore, the Cumulative Volume Delta (CVD) has dropped to the negative region. The CVD measures the difference between buying and selling volumes.

When the buying volume surpasses the selling volume, the CVD displays a green histogram bar, signaling that the price is likely to rise. However, when selling volume exceeds buying volume, the indicator shows a red bar, suggesting that the price may fall.

For ONDO, selling pressure has outpaced the buying volume. This indicates that the correction is not yet over. If this trend remains the same, then ONDO’s price might decline below the 0.236 Fibonacci retracement level at $0.95.

Should the price sink under that point, the next target for ONDO could be $0.58.

But the token might paint a bullish outlook again if buying pressure increases and it fails to drop below the support floor at $1.18. If that happens, the cryptocurrency’s value could see an extended rally to $2.15.