Mid May Update: Technical Analysis
The weekly ONTBTC chart shows that ONT essentially gave away all the gains from February and March and it back at square one, hugging the horizontal support line at 1511 sats and rebounding a bit off of it in the last couple of days.
Both CCI and RSI are still not in the oversold area so ONT could actually go another leg lower right to the support line before bouncing back up.
But judging by the action on the daily ONTBTC chart, ONT has managed to turn the tides after yesterdays’ doji candlestick we saw a nice bump today as ONT is currently 14% up on bitcoin on the day. It now needs to smash all three moving average curves that are bunched up above it. Bunched up pattern with all moving averages together usually results in a big move.
Next stop for ONT, should the jolt upwards materialize, is the 3k satoshis zone.
Ontology is a new high-performance, public blockchain-based project which combines a distributed identity system, distributed data exchange, distributed data collaboration, distributed procedure protocols, distributed communities, distributed attestation, and various industry-specific modules to create an infrastructure for a cross-chain, cross-system, cross-industry, cross-application, and cross-device peer-to-peer trust ecosystem.
Such a decentralized, open and standardized platform will be suitable for implementation in many industries, allowing various companies to create a user friendly, interactive and blockchain-based environment for their business.
Year in Review
Ontology Network did a recap of their activities on the first anniversary of their blockchain. Here are some of the highlights:
🍬 January 8th: Ontology announces 1,000 ONT airdrop to all newsletter subscribers
🍬 January 31st: Ontology airdrops 500 ONT to each attendee at NEO DevCon
⛰ February 8th: Ecosystem White Paper released
⛰ February 9th: Onchain chosen to be part of Microsoft Accelerator
🍬 March 1st: 0.2 ONT per 1 NEO begins to be distributed to NEO holders by the NEO Council
🔧 March 30th: First projects go live on GitHub
⛰ April 13: First version of Ontology roadmaps released
🔧 April 17th: Smart contract support across VMs complete
🔧 April 27th: VBFT consensus support complete
🔧 April 27th: Smart contract IDE SmartX launched
🔧 May 4th: WASM support complete
🔧 May 7th: Network optimization complete
🔧 May 10th: CLI command set and virtual terminal complete
🔧 May 16th: Authority management complete
🔧 May 16th: Pluggable DB support complete
🎥 May 17th: Ontology London meetup
🔧 June: NCC Group completed Ontology codebase
⛰ June 6th: First advisors announced
⛰ June 8th: Ontology Global Capital launched
🔧 June 12th: Transaction parallel verification support complete
🎥 June 27th: Ontology MainNet pre-launch event in San Francisco
🎥 June 30th: Ontology Tokyo meetup
🔧 June 30th: Ontology MainNet goes live
⚓️ July 5th: CFCA trust anchor announced
🔧 July 10th: Comprehensive dApp ONTO launched
⚓️ July 11th: IdentityMind Global trust anchor announced
🔧 July 21st: First batch of nodes finalized
🔧 August 8th: Desktop wallet OWallet launched
⛰ August 22nd: ONT ID added to W3C DID specification
🎥 August 24th: Ontology MainNet event Tokyo (corporate)
🎥 August 25th: Ontology MainNet event Tokyo (public)
🎥 September: Ontology meetups in Singapore, Jakarta, and Taipei
⚓️ September 27th: 4Stop trust anchor announced
⚓️ September 28th: SenseTime trust anchor announced
🔧 October 5th: Threshold signatures support complete
🔧 October 5th: Side-chain and cross-chain POC complete
🔧 October 5th: Chain network POC complete
🔧 October 8th: Parallel ledger writing complete
⚓️ October 8th: Shufti Pro trust anchor announced
🔧 October 17th: DHT Kademila/Chord complete
🎥 October 30th: Ontology San Francisco meetup
🎥 November 1st: Ontology Seattle meetup
⛰ November 8th: Ontology Research Institute opens
🔧 November 8th: dApp development framework Punica Suite launches
How to evaluate fundamentals of a crypto project
We should consider crypto valuations like educated gambling, a ‘prediction market’ where we are betting on the odds of project and token success. There are some catalysts of success we can identify:
- Project success drivers (user traction, strong financial bottomline, good treasury management, network effects/synergies between users and token investors)
Real user traction is the most important driver of success, that is what most of holders call “adoption”. If people start using certain crypto project because they find it useful and it makes their life easier, that is a guarantee of success. So far, almost no crypto project can claim to have done so.
Strong financial warchest that will enable teams behind the project to develop their visions, incentivize other developers to join them and start using their product is also a crucial aspect of any project. Tied into it is treasury management – especially for the project that had big ICO proceeds. Temptation to squander all those millions into “conferences and events” (read hard-core partying on yachts and luxury hotels) was massive, especially if we consider that majority of token projects founders were no-names and ordinary employees that worked for a paycheck before the ICO fairy-tale happened to them.
Another adoption indicator – network effects, where every additional user of a good or service adds to the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.
If you can objectively notice that your favorite token project has some of these traits happening for it, be happy – you might have found a winner.
- Token success drivers (favourable demand-supply dynamics, programmable incentives on token, aligned incentives with management team and consensus on token as common unit of value creation).
Token success is completely dependent on tokenomics. As defined by infloat.co, tokenomics involves the incentivization of certain stakeholders to ensure particular behavior.
So, tokenomics is essentially an incentive structure designed to ensure that a token has a purpose and utility within its native network. It is the study of how coins/tokens work within the broader ecosystem that can be considered as a sovereign micro-economy. This includes such things like token distribution as well as how they can be used to incentivize positive behaviour in the network.
For example, bitcoin is designed to ensure that bitcoin miners have a reason to mine new bitcoin. Miners validate bitcoin transactions and receive (or create) newly minted bitcoin in the process.
On the other hand, individuals, businesses and other bitcoin users pay a transaction fee for miners to include their transaction in the next block. This ensures that even when all bitcoin have been minted (to the tune of 21 million, which should happen in around 2140), bitcoin miners are still incentivized to keep ‘mining’ (i.e. validating transactions).
To paraphrase all of the above in the simplest terms: if you, after weeks of research and reading, can’t figure out why the project needs to have a token, it probably doesn’t.
So why does the token exist then?
– To make the project founders rich.
But there are some people on Twitter, Reddit, Telegram claiming otherwise.
-Yes, they are either: paid to do so by those same founders, they are desperate and delusional bad holders or they are just stroking their own ego with newly learned fancy economic terms and jargon.
Needless to say – stay clear of such projects.
General Market Movements and Sentiment Shift
The downfall of altcoins that were mainstream media darlings at the start of the year, ONT among them, can be attributed, in part, to novice investors getting scared off once the bear market kicked in with a vengeance. Every resurgence of bitcoin in recent period, was met with the, for the most part, inability of altcoins to rally with it. Reason for that can be rookie investors learning from their mistakes, while smart money that was previously watching from the sidelines has begun to enter into bitcoin.
These entities weren’t about to buy BTC when it was trading at an all-time high, but they’ll take a look now, having missed the boat the first time around. None of them, it seems, are interested in altcoins however, despite the fact that many are trading at a 5x discount. Institutional investors may be cautious, but they’re not foolish.
Our ONT Price Prediction for 2019
ONT, as the rest of the market, is tied at the hip of bitcoin’s price action. If bitcoin embarks on another bull run, ONT can hope for one as well. Since that is very unlikely, don’t expect much to change for ONT price-wise in this year. So 2019 will be a year of boring sideways action with minor bitcoin ignited jumps and slumps.
The main currency in cryptocurrency markets is Bitcoin and given this, altcoins tend to fuel Bitcoin runs and Bitcoin tends to do the same in return. Given this relationship, Bitcoin price movements (or lack thereof) tend to effect altcoin prices.
When Bitcoin goes up swiftly, it will likely:
- Suppress or depress altcoins as money flows into Bitcoin;
- Or, take altcoins along for the ride
In cases when Bitcoin plunges, it will likely:
- Depress altcoins as money flows into fiat;
- Or, cause altcoins to boom as money flows into them, but this is rarely the case.
When Bitcoin moves sideways, it will likely:
- Cause altcoins to mimic that as traders wait for a clear sign on the direction of the market;
- Or, cause altcoins to flourish as traders look for returns in altcoins and try to get favorable trades in terms of BTC pairs.
To summarize, Bitcoin is the focal point of the crypto market in many ways, and with BTC trading pairs on every exchange, the gravity of Bitcoin is hard to evade.
ONT-BTC Price Correlation
The vast majority of trading that occurs in the crypto markets are between BTC and altcoin trading pairs. Since most altcoins do not pair with fiat currencies (and only a few are paired with stable coins like USTD), Bitcoin is the next best option. Therefore, when Bitcoin is stable, it forms as the ideal base currency for buying altcoins (which is why altcoins tend to do well when Bitcoin goes sideways).
Correlation is measured on a scale from -1 to 1. Values above 0 shows the degree to which altcoin is moving in the same direction as BTC prices (either up or down in tandem), and values below 0 shows the degree to which altcoin moves in the opposite direction of BTC prices (so when BTC goes down, altcoin goes up, or vice versa). Values around 0 shows that when BTC price moves, altcoins stays steady, or alternatively that when altcoin moves up or down that the BTC price is staying steady.
ONT has had a correlation coefficient of 0.90+ for the most of its market life, with occasional drop to zero territory mostly due to the fact ONT couldn’t follow suit bitcoin’s sudden jolts upwards; as shown on the image below – source.
Based on the correlation analysis, BTC and ONT have a strong positive relationship. The correlation coefficient of their values is 0.65, which was computed based on the last 100-days’ price dynamics of both coins.
The majority of projects will fail — some startups are created just to gather funds and disappear, some would not handle the competition, but most are just ideas that look good on paper, but in reality, are useless for the market.
Vitalik Buterin, co-founder of Ethereum said:
“There are some good ideas, there are a lot of very bad ideas, and there are a lot of very, very bad ideas, and quite a few scams as well”
As a result, over 95% of successful ICOs and cryptocurrency projects will fail and their investors will lose money. The other 5% of projects will become the new Apple, Google or Alibaba in the cryptoindustry. Will ONT be among those 5%?
Good probability of that happening.
First and foremost, Ontology has attracted a broad and ardent community that is more educated and patient than most of other “get rich quick” altcoin’s communities where holders only discuss price in a hostile and ill-bred manner.
The company behind Ontology, OnChain, is very balanced in their approach to the 3 most important dimensions of every crypto project: technology development, forging business partnerships and community fostering.
All of this instills holders with justified hope that their token is worth holding through the bear dominated times. With many altcoin teams closing shops up due to legal or budget issues, Ontology has a chance to establish itself in the group of rare legit crypto projects that will outlast the altcoin pogrom as the crypto industry matures.
All of this summed up means one thing: ONT might live through couple of orchestrated and, for a regular trader, completely unpredictable pumps but the majority of time will be murky sideways trading with small volume and no significant interest from the market.
Price will heavily depend on what BTC will do and since many analysts think BTC will not be making big moves in this year, it is hard to expect ONT will do them either. The price will probably stagnate and record slow-moving depreciation or appreciation depending on the team activity, potential technological breakthrough or high-level partnership.
Market prediction for Ontology price 2019
With the market being completely unpredictable, forecasting the cryptocurrency price is really more of a gamble and luck rather than a data driven guesstimate.
Let’s throw a glance at the eminent publications and personalities, and their predictions regarding the Ontology (ONT) price, which will give us another point of view to consider:
The Ontology price is forecasted to reach $7.29 by the beginning of December 2019. The expected maximum price is $9.55, minimum price $6.33.
Almost diametrically opposite to TradingBeasts stands WalletInvestor’s prediction algo that sees ONT at $0.42 at the end of 2019.
Cryptoground holds middleground putting ONT at $3.45 at the end of the year, which is perhaps most realistic approach to the ONT price prediction.
Ontology (ONT) Future: 2020, 2023, 2025
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