Ondo Tests Critical Support as Tokenized Stock Platform Launch Approaches
Market Structure Shifts Higher
- ONDO is holding close to the $0.41 region following a steep correction of 18% this week.
- The Relative Strength Index (RSI) on the 4HR chart has reached oversold territory, suggesting that a relief bounce could develop.
- The 24-hour Automated Directional Index (ADX) remains high at 42.4, with readings above 25 indicating a prolonged directional move is currently underway.
The Ondo Finance team sent the token retreating from the recent highs, after announcing a two-day delay in the AVAX token streamlining vote and the fractionally offset launch date for the long-awaited evolution of Solana ETF 2.0. Rebalancing and exploration met on-chain deadline after an elaborate trial two weeks ago. A fresh period will be running. Streamline voting without modification will now end on November 2. The newer Solana ETF 2.0 strategy will now run from November 4-10 and will be outperforming the NDX index by 10% at launch.
| Metric | Value |
|---|---|
| Asset | ONDO (ONDO) |
| Current Price | $0.41 |
| Weekly Performance | -18.04% |
| Monthly Performance | -26.64% |
| RSI (Relative Strength Index) | 31.3 |
| ADX (Average Directional Index) | 42.4 |
| MACD (MACD Level) | -0.03 |
| CCI (Commodity Channel Index, 20-period) | -168.33 |
RSI Drops to 31.26 – First Oversold Reading Since Market-Wide Correction
The Relative Strength Index (RSI) remains at 31.26 on the daily chart and this indicates the first move into oversold conditions since the broader crypto correction early this fall. This momentum drain usually suggests that short-term holders are throwing in the towel, especially following an 18% gut-wrenching weekly loss. In basic terms, when the RSI goes sub 30 like this, at the very least it typically precedes a bounce — the size of which depends on if the bulls can conclusively retake certain resistance levels.
What’s interesting is how RSI responded to the decline; it collapsed from neutral over 50 readings straight down into oversold territory without really providing any pause or divergence. This kind of straight-line momentum implosion matches the price action and implies a high level of forced liquidation as opposed to more orderly profit-taking. For swing traders the oversold bounce setup is becoming compelling, but I would emphasize that as we already discussed the first attempt at a bounce often doesn’t hold and ideally some further basing action is needed.
ADX at 42.4 Signals Mature Downtrend Nearing Exhaustion Point
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Importantly, the very low ADX reading coupled with an oversold RSI provides a potentially attractive mean reversion setup. If you are a day trader you should adjust your approach accordingly as the trending behavior that helped you profit during the downtrend is likely to shift to more choppy, range-bound trading as the market attempts to set a new direction. The upcoming launch of the tokenized stock platform may be the event that triggers this shift, however, as long as ADX stays above 25 we can expect elevated levels of volatility.
20-Day EMA at $0.469 Becomes First Major Resistance After Support Failure
The EMA ribbons’ negative divergence and subsequent bearish crossover also serve as a cautionary technical indicator of waning momentum and higher likelihood of further downside to come. This suggests that there is more potential for this correction to extend lower before a sustainable rally back above moving averages could again be considered.
When the 10-day EMA breaches the 20-day EMA, it often triggers broader sell-offs as a classic short-term bearish signal. This indicates the potential for a break of the 50-day EMA within a day or two, currently at $0.549. This coincides with the upper 38.2% Fibonacci retracement level of the March-June rally from $0.263 to $0.676. Should that level give way it will put the psychologically significant $0.50 and the 50% classic retracement level in play, as usual, at $0.470.
Support Stacks Between $0.335 and $0.399 as Bulls Defend Monthly Lows
Sellers have established strong resistance levels above the current price which will block any efforts for the price to go up. The first resistance level is between $0.445 (10-day Exponential Moving Average) and $0.469 (20-day EMA and monthly Support 1 pivot point). The $0.50 price level is a key psychological resistance which is followed by resistance from the monthly pivot at $0.528 and the 50-day EMA at $0.549.
Bullish investors are anticipated to defend support near the monthly low of $0.399, with the weekly S1 pivot at $0.395 also offering reinforcement. This zone has initiated buy responses with every retest, indicating that there has been an accumulation preceding the introduction of the Solana tokenized ETF marketplace. If that level is breached, the subsequent substantial prop is seen at $0.335 – around the monthly S2 pivot, exposing further loss of 18%.
The market structure is evident with $0.399 support and $0.469 resistance, a compression pattern that usually anticipates powerful breakouts that could be fueled by the imminent launches. The increasing volume since the May lows provides bullish confirmation for the breakout. The more a level is tested, the weaker it becomes. Given the amount of times $0.40 has been tested, a break in either direction is likely to be strong.
Platform Launch Timeline Makes Next Two Weeks Critical for Direction
To negate immediate selling pressure, bulls need a daily close above $0.445 which would open the door for a rally towards $0.469. If this level is breached on volume, the measured move targets $0.528 which lines up perfectly with the monthly pivot. The launch of stock trading via cryptocurrencies and the SEC’s recent openness to digitized equities could just be the fundamental aftermath to push price action there.
If the bulls can force a powerful close above $0.399, XLM price could begin its turnaround earlier than expected. Initial resistance around $0.472 has held the coin down since early September. However, a renewal in enthusiasm toward social recovery projects could provide the necessary momentum to clear this hurdle. Buyers should keep an eye on BTC strength to gauge overall market health.
With the technicals looking increasingly attractive, albeit somewhat overstretched to the downside, against the backdrop of the product launch and cash flow growth visibility in hand, any tweaks have the potential to have outsize impact on the price. The first and immediate catalyst is the product launch itself next month. Any positive news with that could see the share price pop disproportionately higher. To the downside, positive news could see ONDO move back through the $0.50s give or take.
