OMG Network (OMG) Rallies but Upward Trend Not Yet Confirmed

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In Brief
  • OMG is trading between support and resistance at $2.60 and $4.15.

  • The price has shown short-term weakness.

  • It is probable that OMG has begun a bearish impulse.

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The OMG Network (OMG) price has increased considerably since Sept 21. However, it looks more likely that the increase is corrective rather than the beginning of a new upward move.



The OMG price began its massive upward move in March 2020, which culminated with a high of $9.80 on Aug 21.

The higher prices could no be sustained though and OMG fell back shortly after. It left a long upper-wick in place, and eventually reached a local low of $2.48 on Sept 21.



OMG Long-Term Levels

Technical indicators are bullish. The RSI is above 50, the Stochastic Oscillator has made a bullish cross and is increasing, and the MACD looks to be making a turn upwards.

Long-term resistance and support levels are respectively found at $8.90 and $3. The former is the 0.382 Fib level of the previous decrease.

OMG Chart By TradingView

Current Rally

The daily price chart shows that the price is struggling to break out from the $4.15 resistance area as can be seen in the upper wicks poking through the zone.

However, technical indicators are relatively bullish. The MACD is increasing and the RSI is above 50. While it has not made a bullish cross yet, the Stochastic Oscillator is moving upwards.

If OMG is able to break out, the next resistance area would be found at $5.55. Conversely, the closest support area is found $2.60

OMG Chart By TradingView

In the short-term, there is considerable weakness in the form of bearish divergence in the RSI.

The most likely area for a reversal to end would be found between $3.27 and $3.53. These targets were found using the 0.618-0.786 Fib levels of the most recent increase and a potential ascending support line drawn from the lows since Sept 21.

OMG Chart By TradingView

Wave Count

Cryptocurrency trader @TheEWguy outlined an OMG chart, stating that OMG has likely begun a bearish impulse and the current movement is just a corrective increase, after which the price will make a lower-low.

Source: Twitter

The decrease from the Aug 21 high does look like a bearish impulse (in black below) with an extended third wave.

If true, then OMG is currently in the fourth wave, after which another decrease will likely ensue. An increase above the wave 1 low at $5.55 would invalidate this particular wave count.

OMG Chart By TradingView

The alternative count would suggest that the price has completed a W-X-Y correction with its Sept 21 low. However, the movement since (highlighted) looks corrective rather than impulsive, making it less likely to be the correct formation.

OMG Chart By TradingView

To conclude, the OMG price is expected to increase towards $5 before beginning another downward move.

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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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