ONDO has recently experienced strong downside pressure. Since it got rejected at $0.42, the altcoin has closed at lower lows for four consecutive days.
As a result, the altcoin breached the $0.4 support and fell to a two-week low of $0.34. As of this writing, ONDO was trading around $0.37, down 5.28% on the daily charts, extending the 10% weekly drop.
But why is ONDO declining?
Notably, it seems the pressure is mostly arising from the Ondo Finance team’s token deposits into exchanges.
According to Nazoku, a wallet linked to Ondo Finance deposited 4 million ONDO worth $1.56 million to Coinbase as part of its ongoing unloading.
Since receiving 22.5 million ONDO from the team, the wallet has so far deposited 20.2 million ONDO to Coinbase in 4 million daily batches.
Although the team has structured exchange deposits into smaller portions to minimize pressure, this hasn’t worked.
Often, when the team wallet makes an exchange deposit, market players perceive it negatively, which in turn impacts sentiment.
Market demand remains steady
Undoubtedly, exchange activity confirms the source of the current market pressure. According to CoinGlass data, ONDO’s Spot netflow only turned positive once over the last week.
As of this writing, netflow was around -$1.51 million, a massive drop from $744k the previous day. The negative netflow suggests traders have constantly tried to absorb the pressure, but demand has remained insufficient.
The same trend holds for the protocol capital flow. According to DefiLlama data, USD inflows rose to $215 million.
The protocol last recorded such inflows in early May, marking an 11-week high, suggesting massive capital flowed into the ecosystem.
Strong demand on the exchanges and the protocol has tended to strengthen upside momentum for the native token, often a prelude to more gains.
Can ONDO hold the pressure?
ONDO recently experienced downside pressure, mostly from the team’s token deposits. At the same time, buyers have attempted to absorb demand, but it has proved inadequate.
As a result, the momentum to the upside has strengthened even further. Looking at the altcoin’s MACD, this indicator formed a bearish crossover and dropped to 0.01.
At the same time, the Relative Strength Index (RSI) also extended its decline, falling to 48, since it formed a bearish crossover days ago. The MACD drop validated this bearish structure and signaled the likelihood of the trend’s continuation.
Therefore, if more ONDO tokens keep flowing into exchanges, the altcoin is likely to drop to $0.33. However, if the accumulation we are seeing finally pays off while the team completes the transfers, the pressure will ease and reclaim $0.4.
Final Summary
- Ondo Finance deposited 4 million tokens worth $1.56 million to Coinbase, raising total deposits to 20.2 million.
- Although demand remains steady, ONDO remains structurally weak and is likely to fall to $0.33 if bulls fail to reverse the trend towards $0.4.
