From today’s opening at $1.711, the price of Ontology has increased by 17% and is currently trading at around 2$. The price spiked up further to $2.182 but has retraced quickly leaving a wick on the daily chart.
As you can see from the ONT/USD daily chart the price action is stuck in the descending channel from the beginning of May when the price was $9.94. The price hit $1.06 level on Tuesday which is the lowest the price has been since the coin hit the market.
The current increased was stopped out by two significant resistance level – the channel’s median line and the horizontal resistance at around $1.99 where the price is at the moment. As the Relative Strength Index (RSI indicator) indicates bullish momentum we will examine the potential of a breakout from the channel.
Zooming into the 4-hour chart I have labeled 3 consecutive WXY corrections from which the second is in the opposite direction. As the last Y wave ends on the channels support line a breakout or at least an interaction with the channels resistance line is to be expected.
If a breakout occurs I would be a looking at the 0.5 Fibonacci retracement level for the next target because is this channel is a part of a larger corrective structure and the price will continue down a retracement to the 0.5 Fibonacci level would be considered as a level on which a corrective wave X is labeled.
Zooming into the hourly chart we can see a symmetrical triangle forming around the horizontal resistance level and considering an exponential increase following the formation of a triangle the pattern could be viewed as a bull flag.
Symmetrical triangle points out that there is aggressiveness from both sides, but judging by the candles buyers are more aggressive at the moment as the price was more above the horizontal resistance level than below it.
Looking at the 15 min chart I have labeled the exponential increase impulse wave and further examined the triangle correction.
As you can see the exponential move was an impulse wave after which a correction is developing inside a corrective triangle. If the formation is respected the breakout and a trend continuation has already started as the wave Y has developed after which the price can continue upward or another X and Z wave are going to develop before the correction ends which is in my mind more likely. In both cases, corrective waves end on the support line which is why a breakout from the upside is to be expected.
Ontology technical indicators are signaling a buy on the higher time frames with the strongest buy being on the hourly chart.
Looking at the ONT against BTC chart we can see that the price has broken out off of the downtrends resistance line which also indicates a strong momentum that doesn’t depend on the Bitcoins recent recovery.
Considering that and the fact that ONT against BTC chart is already showing a breakout, I think that the price of Ontology has more upside in the days ahead.
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