ONT price could sink to lows of $0.38 if bears break below major support areas near $0.50
Ontology price, as is with Bitcoin and other top ten cryptocurrencies, is having a rough day.
At the time of writing, the ONT token is more than 4% in the red while Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) have lost between 2.5%—4%. The benchmark crypto trading pair BTC/USD is now below $19,000, ETH/USD is struggling to break above $580 and XRP is stuck around $0.60.
For Ontology, the short term outlook suggests further declines are possible, although a reversal could put bulls on course for another leg up.
ONT has broken below the lower trendline of a recently formed descending triangle pattern. The breakdown from the bearish continuation pattern suggests that waning demand for ONT will likely see its price dip even further.
The technical outlook for Ontology also shows that the token’s price has broken below a crucial support area around the 20-day simple moving average at $0.56.
With prices headed lower beyond the horizontal trendline of the shrinking triangle pattern, bears are eyeing $0.52 to strengthen their grip.
The daily relative strength index (RSI) supports this dreary perspective and shows that momentum is with the bears. At the time of writing, the indicator currently sits just above 48 and is dipping.
ONT/USD daily chart. Source: TradingView
If price action continues lower past the 50-SMA line at $0.51, an RSI in the oversold territory could see sellers target $0.38.
The 4-hour chart also suggests a short term bearish continuation for ONT/USD. The price has dipped below the support limit of the declining triangle pattern, with the RSI falling sharply towards 30.
The MACD is below the zero line, highlighting the downturn for Ontology from highs of $0.62. At the moment, the token is trading below the 50-SMA—a bearish signal.
ONT/USD price on the 4-hour chart. Source: TradingView
While the technical picture suggests ONT/USD might tank to $0.38, it is worth noting that there is a possibility of a ‘fake out’ with the descending triangle. What this means is that Ontology could dip to lows of $0.38 only for a massive reversal to see the price balloon to a new high.
The immediate outlook also suggests a potential drop to $0.50 followed by an aggressive ‘buy the dip’ period. In this case, ONT/USD might hold above $0.50.
If this happens, buyers will target a retest of the resistance area near the upper trendline, and then at the 20-SMA ($0.56) and 61.8% Fibonacci level ($0.60). Above the Fib level, bulls will have legitimate targets at $0.70 and then at $0.83.