Ontology / USD Technical Analysis: Passing Through A Storm
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- Ontology is under pressure in the short-term with price trading near the neckline of a bearish head and shoulder pattern
- ONT / USD is bearish in the medium-term with price consolidating at the bottom of a triangle pattern
- Medium-term technical indicators are starting to appear oversold
Ontology / USD Short-term price analysis
In the short-term, Ontology is bearish with price now trading around the neckline of a head and shoulders pattern. The downside projection of the bearish pattern would send the ONT / USD pair towards the December 2018 trading low.
Ontology has been trading in a relatively narrow price range since mid-January. The recent decline in the broader cryptocurrency has seen the ONT / USD break below its two-week trading range.
Technical indicators have started to turn higher as the ONT / USD pair attempts to recover from the weakest levels of the trading year so far.
Pattern Watch
The head and shoulders pattern across the lower time frame charts is the most dominant theme in the short-term. A sustained break below neckline support is currently the most favorable scenario.
ONT / USD H4 Chart (Source: TradingView)
Relative Strength Index
The RSI indicator appears to be correcting back towards the neutral in the short-term, traders looking to sell the ONT / USD pair should watch this indicator for signs of a bearish reversal.
MACD Indicator
The MACD indicator is starting to correct higher, at present no price divergence has developed across the four-hour or other lower time frames.
ONT / USD Medium-term price analysis
Ontology is overwhelmingly bearish in the medium-term and is vulnerable to further selling towards its all-time trading low.
The ONT / USD pair has been trading below its 100-day moving average since June of last year, with traders using any minor corrective rallies as an opportunity to sell into the prevailing trend.
The ONT / USD pair is currently trading in a bearish descending triangle pattern on the daily time frame, with price testing the lower trendline.
Ontology is another cryptocurrency that is on the cusp of a technical breakdown, with any bounces higher likely to be sold lower over the medium-term.
ONT / USD Daily Chart (Source: TradingView)
Pattern Watch
Traders should carefully watch the descending triangle pattern on the daily time frame as it provides a solid indicator of the ONT / USD medium-term directional bias.
Range-bound trading action may occur if sellers fail to break below the triangle pattern. Moves towards the upper trendline of the triangle could provide traders with favourable scalping opportunities and a better price entry on the sell-side.
MACD Indicator
The MACD histogram is starting to recover higher on the daily time frame, while the MACD line is currently flat.
Stochastic Indicator
The stochastic indicator appears overstretched on the daily time frame and has moved into oversold territory in a relatively short period of time. When the Stochastic indicator quickly becomes oversold on the daily time frame, it tends to point to trend exhaustion in the medium-term.
Conclusion
Ontology is likely to trade lower in the short and medium terms, traders are using any technical corrections as an opportunity to sell into the prevailing downtrend. Caution is advised for medium-term as the Stochastic indicators start to show signs of downside exhaustion on the daily time frame.
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