What you need to know:
- ONDO is testing a long-standing support zone as downside momentum shows signs of weakening.
- The market structure indicates a potential shift as buyers defend current levels.
- Clarity on the regulations surrounding tokenized securities strengthens Ondo Finance’s broader vision.
ONDO is acting at a decisive technical level, as both market structure and regulatory developments are bringing the project back into focus. On January 30, market analyst Butterfly highlighted that ONDO is testing a key support zone on the three-day chart, an area that has repeatedly functioned as a demand base in previous market cycles.
In recent months, ONDO has maintained a descending channel, with lower highs and continued selling. Any attempt to move up failed immediately, perpetuating the overall negative trend.
The long correction period has brought the price back to a flat support zone, which has been a point of attraction for many long-term buyers in the past.
Currently, the token is trading at the bottom of a downtrend channel. In this region, selling pressure is usually exhausted after a long selling period.
The rate of selling has slowed as the price is currently close to the support level, which could indicate that the sellers are no longer in control. In the past, such regions have been the point of a sharp recovery as buyers defended the region.
ONDO chart structure signals a possible turning point
Structurally, this pattern is quite risky, but very attractive to traders. If the buyers can maintain this support level, the token could break above the downtrend channel.
This will mark a significant shift in the medium-term trend and attract momentum traders while forcing short sellers to hedge their positions.
In this case, price is likely to retest the previous resistance areas that emerged during the previous consolidation periods.
These areas typically become an uptrend target after a bearish move breaks the support level. However, if support is not held, the bearish trend will continue and the price may continue to decline.
Regulatory signals boost Ondo’s prospects
In addition to the technical aspects, Ondo Finance also receives the attention of the regulators. Recently the company received some guidance from the U.S. Securities and Exchange Commission regarding tokenized securities.
The guidance provides information on how various tokenization frameworks apply under existing federal securities laws, which is useful for individuals active in this field.
Ondo Finance released its tokenization strategy in December and it is a great example of this guidance. The recognition of the related debt security frameworks, such as the Ondo Global Markets tokens, by the SEC is particularly noteworthy.
These instruments have attracted the attention of investors and have received approval in the European Union since their inception in September.
Also Read: Can Ondo bounce to $0.47 after reaching critical support at $0.34?
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