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The cryptocurrency ONDO has shown signs of recovery over the past several weeks, trending upward after forming what appears to be a local bottom in March. But now, all eyes are on the critical $1 support level—a price zone that may dictate whether ONDO continues its rally or faces renewed selling pressure.
Despite breaking out of a downward channel in April and forming higher highs and higher lows in the days since, ONDO’s underlying strength is being called into question. Technical indicators and on-chain data suggest that profit-taking and weak demand could be undermining the sustainability of the recent bullish move.
Capital Outflows Hint at Weak Buying Pressure
One of the more worrying signals comes from the Chaikin Money Flow (CMF) indicator, which has remained below the +0.05 threshold. At press time, the CMF has dropped further, even falling under -0.05—a strong indication of capital outflows. Typically, a CMF value below this level suggests that selling pressure is outweighing buying demand.
Additionally, the trading volume following the April breakout has remained relatively muted, further adding to concerns that the bullish trend lacks solid backing from traders and investors.
Market Bottom Formed, But Demand Remains Shaky
Data from the MVRV Z-score, a Glassnode metric that measures whether a crypto asset is overvalued or undervalued compared to its fair value, suggests that ONDO may have already formed a market bottom in March and April. The Z-score had previously dropped to levels not seen since late 2024, usually a sign that the token is undervalued and primed for a reversal.
However, while this signals long-term potential, it doesn’t confirm short-term momentum. That momentum will likely depend on how ONDO behaves around the $1 level.
Short-Term Holders Taking Profits Amid Rally
Further on-chain insights come from the Spent Output Profit Ratio (SOPR). This indicator surged to 1.53 on May 9, coinciding with a strong 27% rally from $0.86 to $1.10. A reading above 1.0 generally means that holders are selling at a profit.
Yet, shortly after the price surge, SOPR dropped quickly to 1.01, suggesting that the profitability of sales has nearly evaporated. This shift indicates that while short-term holders were eager to take profits during the rally, they’ve since pulled back, likely due to diminished returns and caution near the $1 resistance.
Dormant Holders Stay Put, Indicating Long-Term Confidence
Interestingly, dormant circulation data from Santiment showed no significant movement over the past three weeks. This implies that long-term holders have largely stayed on the sidelines, neither accumulating nor distributing large volumes of tokens.
The mean coin age has continued to trend higher since mid-March, with only a minor dip on May 8—coinciding with the price rally. This dip may reflect the temporary uptick in activity among short-term traders, who likely contributed to the slight drop in SOPR and CMF.
What’s Next for ONDO?
The $1 mark is now a psychological and technical level to watch. If this support zone holds, it could give ONDO the base it needs to resume its uptrend. A bounce from this level may attract new buyers and reignite bullish momentum, potentially pushing the price back toward the recent high of $1.10 or beyond.
On the other hand, a clear break below $1 could signal further downside, especially if accompanied by increasing sell pressure and deteriorating on-chain metrics. A breakdown could lead ONDO toward previous support zones around $0.90 or even lower.
Conclusion
While ONDO shows some signs of recovery and long-term potential, short-term risks remain. Weak demand, capital outflows, and recent profit-taking point to a fragile rally that could falter if the $1 support gives way.
Traders and investors should keep a close eye on ONDO’s price action in the coming sessions, as its behavior at this critical level will likely dictate the next phase of movement—either toward renewed gains or deeper losses.
