ONDO’s MVRV ratio has reached 7.06, its highest level in three months.
- ONDO has created a new all-time high at $1.78 after a 37% gain in 24 hours. ONDO’s MVRV ratio at 7.06 suggests that the altcoin may have reached a local top.
Real World Asset (RWA) tokens were among the top performers at press time after their total market capitalization increased from $51 billion to $63 billion within 24 hours. Ondo [ONDO], the fifth-largest RWA token by market cap, was among the top gainers, with 24-hour gains of 37% to trade at $1.66.
ONDO hit an all-time high of $1.78 on 3rd December, in a rally driven by rising buying activity. This surge can be seen on the token’s one-day chart where the Relative Strength Index (RSI) had reached an overbought level of 84.
The RSI has been on a gradual rise since early November suggesting a steady accumulation by traders. However, with this indicator now at overbought levels, ONDO could face a correction in the near term.
Source: Tradingview
The Average Directional Index (ADX) is also tipping north, an indication that the uptrend is strong. This makes it likely that the token could extend its gains.
If ONDO continues to make successive record highs, the next target for the price is the 1.618 Fibonacci level at $2.05.
Whale activity surges
Whale activity around ONDO is on the rise again after declining over the weekend. Data from IntoTheBlock shows that in 24 hours, large transactions exceeding $100,000 increased by over 200% from 13.73M to 42.28M.
Source: IntoTheBlock
Whales hold more than 80% of ONDO’s circulating supply. Therefore, if these large holders become more active, it is bound to increase price volatility.
ONDO’s MVRV ratio hits a 3-month high
ONDO’s market value to realized value (MVRV) ratio has been on a gradual uptrend and has reached 7.06, its highest level in three months. This ratio shows that the market value is seven times higher than the realized value, indicating potential overvaluation.
Source: IntoTheBlock
However, going by past trends, a high MVRV ratio for ONDO often coincides with bullish trends. Therefore, the rising ratio could signal market optimism that could support the continuation of the uptrend.
Open interest hits record highs
The other bullish sign around ONDO is the rising open interest and high trading volumes in the derivatives market. At press time, open interest had reached $285M after a 41% gain in 24 hours.
Source: Coinglass
The rising OI shows an influx of newly opened positions on ONDO as trading volumes in the derivatives market had also increased by over 400% per Coinglass.
It also shows high market participation that could boost liquidity.
These bullish signs support the thesis that ONDO could extend its gains to fresh highs. However, traders should watch out for signs of an overheated market due to the overbought RSI and a high MVRV ratio.
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