ONDO Tests Critical Support After 4-Month Decline, Market Nears Decision

ONDO is trading at a decisive technical level as both market structure and regulatory developments place the project back in 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 acted as a demand base in previous market cycles.

For the past few months, ONDO has maintained a falling channel, with lower highs and continuous selling. Every attempt to move up has failed immediately, thus maintaining 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. This region is typically where the selling pressure is exhausted after a prolonged period of selling.

The rate at which the selling is taking place has reduced 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 rebound 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 are able to maintain this support level, then the token will be able to break out above the downtrend channel.

This will be a significant shift in the medium-term trend and will attract momentum traders while forcing short sellers to cover their positions.

In this case, the price is likely to test the previous areas of resistance once again, which were created during the previous periods of consolidation.

These areas usually become targets for the upside after a bearish movement breaks the support level. However, if the support is not held, the bearish trend will remain, and the price may continue to fall.

Regulatory Signals Add Strength to Ondo’s Outlook

Aside from the tech aspects, Ondo Finance is also gaining attention from 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 helpful for individuals operating in this space.

Ondo Finance released its tokenization strategy in December, and it is a good example of this guidance. The recognition of the related debt security frameworks, like the Ondo Global Markets tokens, by the SEC is particularly notable.

These instruments have attracted the attention of investors and received approval in the European Union since they started in September.

Also Read: Can Ondo Bounce to $0.47 After Hitting Critical $0.34 Support?