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OMG prepares to dump some more

  • On-chain metrics are opening the Pandora box with OMG/USD likely to breakdown to $2.
  • OMG Network is building a bearish momentum following a rejection by the 50 SMA and 200 SMA.

The drab action across the cryptocurrency market is not sparing OMG Network. A bullish momentum put in place towards the end of September lost steam at $4.4 earlier in October. Over the last three weeks, OMG has narrowed beneath a descending trendline.

On the downside, support has been established between $3 and $3.2. However, recovery has not been forthcoming, especially with the widespread sluggish trading across the market.

OMG Network bearish signals getting stronger

The 4-hour chart presents a challenging resistance at $3.4, as highlighted by the 50 Simple Moving Average (SMA). As it stands, OMG has already been rejected by this resistance, but it is exchanging hands at $3.28.

In addition to the first resistance, both the 100 SMA and the descending trendline add intense pressure to the cryptoasset. The Relative Strength Index (RSI) reinforces the bearish outlook as it drops to the oversold region.

 Several on-chain metrics cement the bearish picture for OMG. For instance, a significant decrease in daily active addresses suggests that investors are dormant. Similarly, the volume has considerably gone done from its monthly peak on September 29.

The two metrics point to a diminishing bullish front. More declines are expected in the near term unless a massive price action takes place in Bitcoin.

OMG Network volume/daily active address chart

Consequently, Santiment’s age consumed model shows little no movement of idle OMG tokens. In other words, the age consumed measures the number of tokens moved relative to the period they have stayed idle. The metric helps traders identify incoming volatility periods. For now, the low age consumed translates to the absence of volatility.

OMG Network age consumed chart

OMG age consumed

Looking at IntoTheBlock’s IOMAP model, OMG Network is not likely to change the trend upwards anytime soon. Extremely challenging seller congestion zones lie ahead. For instance, one of the most substantial hurdles runs from $3.4 to $3.5. Here, roughly 2,300 addresses bought nearly 7.5 million OMG.

On the downside, the absence of strong support shows that there is room for bears to explore. The most robust buyer concentration area stands between $2.8 and $2.9. Here, an estimated 1,200 addresses previously bought about 5.4 million OMG.

OMG Network IOMAP chart

OMG IOMAP chart

Looking at the other side of the picture

It is worth mentioning that the bearish outlook’s invalidation will only come into the picture if immediate support at $3.2 remains intact. A reversal past the 50 SMA and 200 SMA in the 4-hour chart may encourage more buyers to join the market.

The most significant resistance is the 100 SMA in conjunction with the descending trendline. If the price makes it above this zone, the next targets on the upside will be $3.8 and $4.4, respectively.

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