Ondo Finance (ONDO) Bulls Defend the $1.8 Support as the RWA Sector Heats Up

Ondo Finance [ONDO] has announced the Ondo Chain, a purpose-built Layer-1 chain for institutional-grade RWAs.

Ondo Finance [ONDO] institutional RWA chain sees promising metrics

Ondo Finance [ONDO] recently announced the launch of the Ondo Chain, a Layer-1 blockchain designed specifically for institutional-grade real-world assets (RWAs). This news, coupled with growing bullish performance in the RWA sector, has piqued the interest of investors.

To assess whether the ONDO token is undervalued and gauge the broader market sentiment toward the chain, AMBCrypto undertook an analysis of on-chain activity and market performance.

Rising activity bodes well for ONDO…

Source: Santiment

The number of wallets with specified holdings on the charts has been increasing. Usually, this signals whale addresses increasing in number as retail investors (addresses with smaller holdings) sell-off.

However, in this case, all cohorts have been increasing, indicating increased accumulation, demand, and network activity. This points to renewed network growth, which is a positive sign for the chain and its investors.

Source: Santiment

The daily active addresses metric has been trending higher since early January, further suggesting increased on-chain activity. Another metric that saw growth was the network growth metric, which measures the number of new addresses created on the network each day.

While transaction volume has plateaued over the past three weeks, other activity metrics were encouraging.

Source: Santiment

On-chain activity was not the only metric that saw an uptick, as social metrics also showed a positive trend. The Social Volume has been trending higher since early January, indicating growing interest in Ondo.

The Weighted Sentiment has also remained largely positive over the past three weeks. However, the Open Interest fell to lower levels over the past ten days, compared to the previous month.

This drop could be attributed to liquidations from the rapid losses on 3 February, as well as traders opting to remain on the sidelines following the volatility in early February.

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Source: ONDO/USDT on TradingView

ONDO bulls have managed to defend the 61.8% Fibonacci retracement level at $1.8 over the past six weeks, plotted using the rally in November. Despite the Capital Movement Factor (CMF) indicating strong capital outflows, the price has not made lower lows over the past month.

This observation was encouraging and highlighted the relatively strong performance of Ondo among other mid- to large-cap altcoins. This relative strength could bode well for the bulls in the coming weeks.

The range formation between $1.18 and $1.6 could quickly transition into an uptrend if demand for Ondo remains steady, especially once the broader market sentiment stabilizes.