- On-chain metrics have turned strongly bearish for OMG, adding weight to the impending breakdown.
- Selling pressure is rising under the 50 SMA; OMG’s downside targets at $3 and $2.6.
OMG Network’s recovery has been cut short on under $3.4. A correction is underway amid a strengthening bearish grip. If push comes to shove and immediate support fails to come into the picture, OMG/USD might revisit $2.6 (November’s buyer congestion zone).
OMG Network buyer congestion zone
The 50 Simple Moving Average limits OMG/USD immediate upside. Moreover, the Relative Strength Index adds credibility to the correction. If the RSI continues to dive further, a quick breakdown might occur to $3 or even $2.6.
OMG/USD 4-hour chart
Santiment’s network model shows that the number of new addresses created on the OMG Network topped-out on November 24 at a high close to 1,100 addresses daily, calculated on a 30-day trailing average. Since then, OMG Network growth has declined by new active addresses joining the protocol.
At press time, only 292 new addresses have joined the network based on this trailing average, which can be considered a major bearish sign for OMG.
OMG network growth chart
Another on-chain model by Santiment, the holder distribution, adds credibility to the bearish narrative after whales started offloading their tokens, perhaps due to profit realization. The number of addresses holding between 100,000 and 1 million OMG have topped-out recently at 80 and have declined to 78.
One address holding over 10 million coins appears to have sold OMG on December 3. If the selling pressure rises, overhead pressure will intensify; thus, OMG Network could correct further.
OMG Network holder distribution chart
On the other hand, an uptrend may continue to build if OMG recovered above the 50 SMA hurdle. Trading above this level will bring some semblance of stability to its market. Buyers are likely to start joining the market as they create enough volume for gains past $3 and $4, respectively.