Despite a mostly positive news flow, the outlook for the ICO token with the largest market capitalization is decidedly mixed.
The OmiseGo-US dollar (OMG/USD) exchange rate has witnessed wild swings this month as China’s ICO crackdown and subsequent exchange ban rocked the cryptocurrency markets. OMG, however, was particularly affected by both moves, owing to its status as one of the more valuable cryptocurrency networks to have originated in an ICO and mainstream visibility.
Against this backdrop, the digital asset clocked a record high of $13.70 on September 12 and fell to a low of $6.50 on September 15. Overall, though, the 52.55% drop from the record highs has been short lived, as prices have recovered to $11.40 earlier this week as cryptocurrencies in general regained poise.
The recovery in OMG/USD exchange rate could also be attributed to the fact that the project successfully reassured investors about its potential to impact other global markets with its ethereum-based value exchange protocol.
“China ban only affects decentralized currencies,” said an update from OmiseGo in a statement that appears was at least in part responsible for a snap back to $11.40.
Elsewhere, it was reported this week that OmiseGo, along with ethereum-based gold tokenization platform Digix Global, will back Japan-based venture firm Global Brain’s accelerator, GB Blockchain Labs. GBBL will fund blockchain startups and shall offer support for token offering-based crowdfunding efforts.
Still, as per CoinMarketCap, OmiseGo has lost 7% in the last 24 hours. On a weekly basis, the digital currency is down 8.9%. It is one of the few cryptocurrencies, which still positive on a monthly basis; up 13%.
On a weekly basis, the digital currency is down 8.9%. It is one of the few cryptocurrencies, which still positive on a monthly basis; up 13%.
Head-and-shoulders bearish reversal
According to StockCharts, “A Head and Shoulders reversal pattern forms after an uptrend, and its completion marks a trend reversal. The pattern contains three successive peaks with the middle peak (head) being the highest and the two outside peaks (shoulders) being low and roughly equal. The reaction lows of each peak can be connected to form support, or a neckline.”
The chart above shows a head and shoulders pattern is perfectly positioned at the top of the recent uptrend. The neckline support stands at $6.05 levels.
Stochastic is oversold, although the RSI is below 50.00 levels, i.e. in the bearish territory. The chart shows lower highs formation.
A bearish 50-simple moving average [MA] and 100-simple moving average crossover has been confirmed. The 50-MA and 200-MA bearish crossover looks likely.
OMG looks set to test neckline support of $6.055 levels. An end of the day close below $6.05 would signal bullish-to-bearish trend change and shall open doors for a sell-off to $2.5 levels.
On the higher side, only a convincing break above $11.40 would abort the bearish view and could send prices back to $15.00 levels.
Weights via Shutterstock
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.