[updated December 15, 2018] OMG/BTC presently finds itself in uncharted waters, as the price action on the weekly and daily charts has taken out the support levels that were last seen in December 2017. With the last effective support level ever now broken, the bottom has come off the OMG/BTC price action and traders will have to look for possible points at which to sell on rallies. Trying to buy at this point will provide difficult in the absence of any previous support reference points. Traders who are bullish on OMG/BTC in the long term will have to allow OMG/BTC to naturally find a floor on which they can initiate long orders.
This analysis showcases what has occurred on OMG/BTC and what the next few weeks to months will hold for this pair.
At the moment, there is no OMG-specific news in the market, and all the attention has focused on Bitcoin and the hard fork of Bitcoin Cash. The OmiseGo team has however continued to improve on its partner-base, announcing partnerships with Mass Vehicle Ledger (MVL) to provide a proof-of-concept for ride-hailing company TADA. Such partnerships are expected to bring long term benefits to OMG when mass adoption of its token has occurred. These partnership news releases are not expected to impact prices in the short term, and most price action in the market are being affected primarily by Bitcoin news.
To see how far we have come since the last analysis piece, we compare the weekly chart of last month with the current weekly chart. We can see on the chart for October below shows that the price action was pushing against the support level.
OMG/BTC Weekly Chart: October 28, 2018
This is the picture of OMG/BTC now, showing that the support line has been broken with an increase in selling volume.
OMG/BTC Weekly Chart: November 26, 2018
We can also see that the 50-EMA line continues to remain a point of dynamic resistance to price action.
To get a clearer picture of what is happening with OMG/BTC, we move to the daily chart which provides a medium-term view of the asset pair. We see that the 50-EMA line will continue to be the reference point for dynamic resistance to price action, reinforcing the expected downward move that is to happen, following the breakdown of the support line by the price action of the just concluded week.
OMG/BTC Daily Chart: November 23, 2018
The daily chart reveals the following:
- Selling volumes increased over the last few days, indicating that the OMG/BTC pair is being dumped in a greater degree than was the case in the last few weeks of downward price movement.
- The 50-EMA dynamic resistance remains intact.
- At 0.000379, the price action has effectively broken the lowest point that OMG/BTC has ever attained, opening the door for new lows.
So what are the possible trade scenarios for traders wishing to trade the OMG/BTC crypto pair?
OMG/BTC is in a clear downtrend, and with the lowest support level that OMG/BTC has ever attained now effectively broken, there is no reference point for support. Therefore, the only expectation is for OMG/BTC to keep heading lower and to locate whatever floor it can find. This may have to come from the news.
The recommendation is to sell on any rallies. Rallying points will be the 50-EMA line, backed up by an increase in selling volume following any rally. Furthermore, the broken support line of 0.000408 will be another reference point for resistance; a static resistance level at that. It is possible that this may be a rally point at which new short trades can be initiated.
The likelihood of any return to bullishness in the short and medium term is very unlikely. Any such rallies that end up breaking either the 50-EMA dynamic resistance or the 0.000408 static support-turned-resistance will have to occur on the back of very strong positive news.
The long-term and mid-term outlook of the OMG/BTC pair is:
- Long-Term – bearish
- Mid-term – bearish
Please note: this analysis done on the weekly chart usually takes several weeks to months to play out. So price scenarios described here may take some time to evolve.