Ontology (ONT) Technical Analysis: Waiting on These Confirmations Before We Get Bullish About ONT

Ontology is enjoying a 7.82% surge against BTC today as traders rally in favor of the project’s new Neptune release. Neptune is Ontology’s new 2.0 python smart contract compiler, which includes over 19 syntax improvements and features to help increase open-source smart contract development on the network. The announcement was made public in the early hours of this morning via Twitter, and has so far helped lift 24hr trading volume by more than $12 million, as buyers start to return to the ONT market. This increased momentum has allowed the asset to break through a long-standing resistance, but unless we see further confirmations on the chart, this could just be an intraday pump.

On the 1D ONT/BTC, we can see that for the last seven months, the asset has been stuck in a bearish decline and has dropped by as much as 85% in value. In the last two months, however, the price action finally began consolidating inside a pennant pattern between a long-standing downtrending resistance and a recently established uptrending support, as bullish momentum started to pick back up again.

After reaching maximum consolidation inside the pennant today, ONT bulls managed to break through the resistance at around 1,660 Sats. While this is promising news for the asset, it is unclear whether this is just a brief pump in activity driven by the new Neptune announcement, or the start of a new bullish phase.

Looking at the 1D Ichimoku indicator, we can see that candles are beginning to close in on the resisting Kumo cloud (blue arrow) but it is not yet supported by a bullish T/K crossover. This suggests that while short-term buying momentum is building, it’s not quite enough yet to take ONT through the Kumo cloud.

On the 4H RSI and MACD indicators, there are signs that the current momentum is correcting after the breakout and that the asset is potentially looking to throw back onto the previous resistance as a new support before a new impulse leg begins. This is a common occurrence after a pattern breakout and could provide bullish traders with a new foothold to recover along before attempting to break into the Kumo cloud above. 

The first minor confirmations to look out for as we wait to see if this is a genuine reversal will be whether indicator dots begin to appear beneath the price action on the Parabolic SAR indicator. This is usually a strong indication that the trend has turned bullish and should continue upwards. The Aroon indicator can also be used to identify a new bullish trend if the Aroon Up line passes through and above the Aroon Down line.

If these signals are met, then we will need to see ONT break out above the top of the resisting Kumo cloud at 2,035 Sats before we get our first major confirmation of a long-term bullish trend reversal. This particular level was a key resistance for ONT back on March 2018, when the project first launched on Binance, and was also a brief resistance on August 13, 2018. If candles close above the kumo cloud, it will be the first time ONT has ever done this on the 1D chart. This will be the big buying sign that we look for as we continue into Q1.

Ontology (ONT) Price Targets

All ROIs are calculated from the asset’s current value at 1,665 Sats.

PT1: 1,798 Sats (7.99% ROI)
PT2: 1,899 Sats (14.05% ROI)
PT3: 2,035 Sats (22.22% ROI)