[updated November 26] Originating from China, the Ontology project is a blockchain project helping business harness the power of the distributed ledger technology. The coin has not been spared during the bearish momentum that has plagued the cryptocurrency market this year with ONT prices dropping to yearly lows.
The past three months have seen ONT lose over 50% of its value. However, recent developments promise to push its price back up. Currently, ONT is trading at a price of $79 with a market cap of $235 million.
Below is an analysis of ONT price in terms of Ontology news items and technical analysis on ONT/BTC trading pairs.
In less than a month, Ontology has partnered with two firms specializing with AML and KYC conformity.
One is Shufti Pro with which Ontology signed a Memorandum of Understanding (MoU) that will see the two firms join hands in developing digital identity services.
With Ontology being a public blockchain, digital identity is a cornerstone in the success of the blockchain project which is based on trust.
By partnering with Shufti Pro, a leading firm providing verification solutions on a global scale, more companies are bound to trust Ontology. It’s a move that will lead to increased adoption.
While signing the MoU, Victor Fredung, CEO, Shufti Pro, said:
“We have followed their [Ontology] progress with interest for some time, and now is the right time to move forward. Furthermore, we believe that the combined use of new and innovative blockchain technology with cutting-edge ID and identity verification is a powerful combination for global business operations.”
In addition, Ontology seems to be gaining traction beyond this. MIXMarvel, a gaming platform and content community, has signed an agreement with Ontology to bring its “Hyperdragons” game to the ONT network. This news hit the market 2 days ago. This adds to the partnership signed with the Evernym and the Sovrin Foundation to form an East-West digital identity consortium.
Partnership With 4Stop
Ontology has also entered into a collaboration with 4Stop to provide Know-Your-Customer verification on its platform.
With financial regulators concerned about money laundering and terrorist financing, having high-end solutions guarding against these vices is a significant relief not only for regulators but also for those eyeing the Ontology platform.
Increased trust in the platform will lead to increased adoption. It’s something that will drive the price of ONT even higher.
Commenting on the partnership, Ingo Ernst, the CEO of 4Stop said:
“With the ever-evolving adoption of blockchain technology, we are very excited to be part of Ontology’s innovative blockchain project by providing them with further KYC services to verify and authenticate personal data across the globe. Creating a mainstream, standardized, and easily accessible compliant and trusted infrastructure is something we are both passionate about, and we look forward to future developments.”
Ties with China
Andy Ji, Chief Strategy Officer at Ontology, has previously held top positions in the Chinese government. He was once the General Secretary of the Ministry of Industry and Information technology in China.
Its founder, Jun Li has also worked with Financial Futures Exchange in China and Infosys.
With such connections, it’s only safe to assume that the Ontology platform will be viewed favorably in China.
Although China has clearly stated its stand regarding cryptocurrencies, it has taken the lead when it comes to blockchain adoption.
With the growing use cases for the Ontology blockchain, it’s not hard to see the platform gaining mass adoption in China. Consequently, this is likely to push the price of ONT up.
In conclusion, within a year of existence, Ontology (ONT) has, without doubt, manifested its strength as a platform. Partnerships have also helped pushed its price up. And once the AML and KYC solutions are fully implemented, expect its price to rise even higher as more businesses get on board.
The ONT/BTC pair has seen its price action forming a symmetrical triangle on the weekly and daily charts for several months now. It is now located at the apex and has breached the support trendline of the triangle pattern. The analysis presented below gives some insight as to how traders should approach the trading of the crypto pair that features Ontology and the base asset, and Bitcoin as the counter asset. The outlook for ONT/BTC is presented below, with charts taken from the price action on the Binance exchange.
ONT is traded on Binance in a pairing with BTC, and the chart shown below paints the long-term picture as presented on the weekly chart. We can see that the price action has finally breached the support line of the triangle pattern, indicating that a downside break is in the offing.
ONT/BTC Weekly Chart: November 23, 2018
We can also see that there is a preponderance of selling going on, which is supported by the presence of red volume bars of increasing amplitude that indicates that the number of sellers is gradually rising.
To get a clearer picture of what is seen on the weekly chart, the daily chart is reviewed in greater detail. This chart is shown below,and clearly shows that the price action has broken below the lower triangle trendline, with an upside pullback.
ONT/BTC Daily Chart: November 23, 2018
The following points can be deduced from the 2 chart images shown above:
- Price action in the long term is pointing towards a downside breakout, supported not just by the breach of the lower border of the symmetrical triangle, but by gradually increasing selling volumes. The importance of the volume information cannot be overstated.
- The daily chart shows that the breakout is already underway, with a pullback pattern. This is a normal finding in many situations where critical levels of support or resistance are broken. Price action tends to attempt to move back to where it has come from, but the broken levels of support or resistance perform what is known as a “role reversal”. In the daily chart of ONT/BTC, this role reversal function will see the lower border of the triangle changing roles from being a support line, to being a resistance that will reject the pullback attempt of price back into the triangle.
So how do these points translate into actionable trade scenarios?
Trade Scenario 1
In the long term and medium term, the expectation is to see a selloff in the ONT/BTC pair, as a consequence of the completion of the symmetrical triangle pattern. This pattern is traditionally held as a continuation pattern. As price was already in a downtrend prior to the formation of the triangle pattern, the resolution of this pattern with price breaking below the triangle to keep moving south is totally in line with the outcomes expected with the chart setup. We expect the price action to be rejected at the lower border of the triangle on the daily chart, and for price to resume its downward trend.
Those trading off the daily chart should also note the role of the 50-day exponential moving average (blue line on chart), which is expected to continue playing its role of a dynamic resistance line. We can see here that it is intersecting the lower border of the triangle, and will provide enhanced resistance to pullback action at that area.
Trade Scenario 2
On the long term chart, prices may not cascade southwards as fast as may be expected. We need to see some increase in the selling volume (i.e. volume bars with greater vertical height) for prices to keep going south. If the cryptocurrency market continues with its bearish sentiment heading into December, then we will see more selling on ONT/BTC to take prices southwards. If this happens, the next support area of 0.0001935 will be targeted.
The long term, mid-term outlook of the ONT/BTC pair is:
- Long Term – bearish
- Mid-term – bearish
Please note: this analysis was done on weekly and daily charts. It takes a whole week for a candle on a weekly chart to form, so these moves may take several weeks to play out. Entries should be made on shorter time frame charts such as the 4-hour chart.