Ondo [ONDO] witnessed an 8.93% drop in Open Interest in the past 24 hours, and its price was down 4.78%. The altcoin has some upward momentum still – it has rallied 12% over the past week.
This Open Interest depression signaled that speculators were likely in the process of exiting the market, awaiting the next strong trend. It must be noted that the altcoin challenged the $0.47 local high on Saturday, the 9th of May.
In a recent report, AMBCrypto had warned that the 1-day structure remained bearish. A rally up to the 78.6% retracement level at $0.413 was anticipated, with a small chance of $0.47 being tested before a bearish continuation.
News that a team-linked wallet moved Ondo tokens worth $63.9 million to Coinbase had already warned of potential sell pressure. Though momentum was strong recently, the bearish outlook appeared to have held so far.
The bearish ONDO setup following the recent rejection
In a post on X, influencer Cryptorphic laid out a short setup that lined up with the 1-day ONDO chart posted earlier. If the price breached the descending trendline and went above $0.42, it would invalidate the bearish setup.
Meanwhile, to the south, the $0.26 lows that the price had consolidated around in late April, before the recent rally, were the price target. The targets and thesis aligned well with the bearish 1-day swing structure for ONDO.
The cost basis distribution heatmap also supported the bearish outlook. It highlighted a supply of 161.7 million ONDO tokens in the $0.455-$0.470 range. This figure was at 268.6 million tokens before the swing failure pattern that occurred last Saturday.
Onchain as well as from a technical standpoint, the Ondo price action has a bearish bias. In the coming days and weeks, the bearish continuation toward the $0.26
Final Summary
- Ondo managed to rally past the Fibonacci retracement level at $0.413 but was halted at the $0.47 swing high.
- The cost basis distribution heatmap and the price action in recent days supported a bearish bias.
Source: https://ambcrypto.com/examining-whether-ondos-rejection-at-0-47-opens-door-to-0-26/