Harmony (ONE) hits the crypto watchlist this week as a couple of different trade setups pop on the radar.
Will recent consolidation lead to a breakout? And will longer-term players look at the recent dump as a buying opportunity?
Here’s a chart that I’m looking at:
ONE/USDT: Daily
ONE/USDT Daily Crypto Chart
For those who don’t know, ONE is the native token on Harmony network, open-source blockchain for building decentralized applications (dApps).
It’s attracted a lot of capital in the past quarter–in huge part to the popular blockhain game DeFi Kingdoms (a dApp that gamifies token swapping, liquidity providing and NFTs)–growing into a top 10 blockchain in terms of total-value-locked (currently over $1.39B).
This rise in popularity is likely why we saw the exponential rise of the ONE token in value, from the 2021 crypto crash low of around $0.047 to a January 2022 high of $0.0379, or a 684% gain.
But like most crypto assets, ONE/USDT has fallen dramatically over the past few weeks, bringing the market to early December levels, and creating interest patterns for both short-term and longer-term players to watch.
For short-term players, the market has been in a tight range over the past ten days (roughly between $0.17 – $0.20), creating a potential consolidation break pattern to play if volatility picks up quickly. With a strong catalyst, a breakout would likely draw in short-term technical players and spark a momentum move in either direction, depending on the catalyst.
For longer-term players, this current trading range is a previous area of strong interest (recently behaved as a strong support area in December), and it’s the 200 SMA area. These are areas that could attract longer-term bulls and resume the uptrend if we continue to see support hold and turn into bullish reversal patterns.
As far as catalysts, the Harmony team has a pretty exciting calendar of feature updates ahead that could move capital and spark volatility; mainly the upcoming release of a Trustless Ethereum Bridge and the ability to stake ONE to the network with MetaMask.
The former could attract more assets to Harmony to escape Ethereum’s high transaction fees, and possibly cause more ONE tokens to be used for transaction fees (some of which are burned).
While the latter may contribute to more ONE tokens being locked into the network. Both scenarios would likely lead to a reduction in circulating supply over time (a bullish arguing point longer-term).
Overall, these events could lead to a recovery in ONE/USDT from these depressed levels, or at the very least, a short-term trade opportunity for both the bulls and the bears to watch out for.
But we’ll sit on the sidelines for now to see if the macro environment improves, and to see the market’s reaction to these new features before considering a position in ONE.
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