Osmosis (OSMO) Nears Breakout as It Holds Key Demand Zone

Key Takeaways

• Descending trendline resistance still capping price recovery.
• Final wave (v) down may be completed before reversal.
• RSI divergence suggests the potential for upside momentum.

Osmosis (OSMO) remains in a prolonged downtrend, with the price currently testing a critical support zone.

The daily chart indicates the completion of a corrective ABC pattern, while the 1-hour chart suggests the possibility of one final downward move before a potential recovery.

OSMO Price Analysis

On the daily chart, OSMO has been in a persistent downtrend, respecting a long-term descending trendline that has consistently acted as resistance since the peak from Jan. 2024, when the price reached $1.96.

The recent price action suggests the completion of a corrective ABC structure that started on Aug. 6.

This structure followed a previously completed five-wave impulse that led the price to $0.30, with wave C likely marking the end of the broader corrective cycle.

The price currently trades within a strong horizontal support zone at $0.19-0.32, historically providing buying interest.

The Relative Strength Index (RSI) on the daily chart shows signs of bullish divergence, with price making lower lows while RSI forms higher lows. This indicates that bearish momentum is weakening.

However, the downward pressure remains strong as the price continues to respect the descending trendline. A breakout above $0.40 would be a significant bullish signal, potentially confirming a reversal. 

Conversely, failure to hold above the current support region could open the door to further downside toward deeper Fibonacci retracement levels.

The long-term Elliott Wave structure suggests that if this is indeed the completion of wave C, OSMO could be gearing up for the start of a new impulsive wave to the upside.

However, confirmation is required through a decisive move above the descending resistance and increased volume.

OSMO Price Prediction 

The 1-hour chart presents a more granular view, indicating that OSMO is still within a bearish wave structure.

The price attempted a move higher on Feb. 15 within wave (iv), but it got rejected at the $0.40 level, aligning with the broader descending resistance trendline.

Wave (iv) appears to have been completed, and the next move is likely a final wave (v) downward, potentially targeting the 0.618 Fibonacci extension at $0.164 or the 0.786 level at $0.099.

A move to these lower levels would align with previous liquidity zones where buyers may step in.

However, an alternative scenario exists where the price finds support within the horizontal support zone (highlighted red zone) and begins to reverse earlier than expected.

Reclaiming the 0.3126 level and a subsequent breakout above 0.40 would confirm a bullish reversal, targeting higher Fibonacci extension levels.

The RSI on the 1-hour chart is currently near oversold conditions, suggesting that the downside move may be reaching exhaustion.

If a bullish divergence forms, it could indicate that wave (v) is nearing completion, leading to a potential reversal.

Key Levels to Watch

• Immediate Resistance: $0.3126 (0.236 Fibonacci retracement).
• Key Resistance: $0.4043 (local high).
• Immediate Support: $0.2560 (0.382 Fibonacci retracement).
• Critical Support: $0.1644 (0.618 Fibonacci retracement).
• Final Downside Target: $0.0991 (0.786 Fibonacci retracement).
• Invalidation Zone: Below $0.0161, indicating further prolonged downside.