Ondo Finance (ONDO) Crypto Token Retreats for Three Consecutive Days as Market Risks Rise

The ONDO coin retreated to a low of $1.8018, much lower than the year-to-date high of $2.1431, bringing its market cap to over $2.7 billion.

Ondo Finance (CRYPTO:ONDO) crypto token price declined sharply for three consecutive days as market risks continued rising in the market. The ONDO coin price dropped to a low of $1.8018, which was significantly lower than the year-to-date high of $2.1431. At the current price, the coin had a market cap of over $2.7 billion.

Hawkish Fed decision, token unlocks

The Ondo crypto price declined even after the Federal Reserve concluded its interest rate decision. The bank decided to reduce interest rates by 0.25%, which was largely anticipated by most analysts.

However, officials hinted at the possibility of the bank delivering two rate cuts in 2025 as they revised their inflation projections upwards. They now anticipate core inflation to reach 2% in 2026.

The Federal Reserve interest rates are important for Ondo Finance because the network is designed to tokenize the financial services industry. Its two products are the US Dollar Yield (USDY), which has $450 million in assets and a 4.65% yield, and US Treasuries (OUSG), which has $173 million in assets and 4.59% yields.

These tokenized assets tend to get their yields from US Treasuries, whose yields rose following the Fed decision. The 10-year Treasury yield rose to 4.5%, while the 30-year rose to 4.69%. These yields will likely see inflows into Ondo Finance for a longer period.

OUSG and USDY are better alternatives to traditional stablecoins like Tether and USDC mainly because of their yields. They are used in applications like DeFi, savings, payments, and as collateral.

Ultimately, Ondo Finance is hoping to become a major player in the growing tokenization industry, which is expected to have trillions in assets in the next few years. Analysts expect tokenized assets to be over $50 billion in 2025.

Another catalyst for the ONDO price is that the coin will begin its token unlocks on January 18 when 2.57 billion tokens will be unlocked. While unlocks are usually bearish for a cryptocurrency, most tokens tend to rally into the unlocking event as hedge funds push the coin.

Ondo Crypto Price Prediction

The daily chart shows that the ONDO price formed a cup and handle pattern between June and November this year. A cup and handle pattern has a horizontal line on the upper side and a rounded bottom.

Ondo Finance has moved above the 50-day moving average and the upper handle. As a result, by measuring the distance between the upper and lower handle, we can estimate that the coin will rise to $2.4364, which is about 30% above the current level.

A drop below the support at $1.4820, which is the upper handle, will invalidate the bullish view and signal that there will be more downside.