OMG Primed for Big Bullish Push Towards $20.00 in 2022?

Joel Frank
Updated: Dec 23, 2021, 11:24 GMT+00:00

OMG looks set to continue moving higher within the confines of a long-term log chart ascending trend channel in 2022.


OMG Network’s native coin OMG has been performing well in recent sessions. The OMG Network is a “value transfer” network for Ethereum and can be used for any ERC-20 token that aims to let people move money and a variety of digital values on the blockchain faster, cheaper, and without compromising on security.

Since probing recent lows in the $5.60 per token area on Monday, a general improvement in cryptocurrency and broader financial market risk appetite has helped the OMG/USD recover all the way to the upper $6.00s, where it trades about 20% higher from earlier weekly lows. At one point this Thursday, the cryptocurrency was even testing $7.00.

Technical buying has helped accelerate the recent run of gains. OMG/USD broke to the north of a downtrend that had been capping the price action for most of December yesterday, whilst also managing to push to the north of its 21-day moving average, which is now seemingly offering support. Bullish short-term speculators will argue that recent price action suggests a test of resistance in the $7.50 area in the near-term is higher likely, amid a lack of any notable resistance in the interim to the upside.

OMG breaks above the recent downtrend and 21DMA. Source: FXEmpire

Still a Long Way From Recent Highs

Even if OMG/USD was to rally back to the mid-$7.00s, that would still leave the coin some 60% below its record peaks reached as recently as November. But it should be noted that drawdowns such as this are “normal” for OMG/USD. Indeed, since the start of 2020, the cryptocurrency has experienced four separate drawdowns of between 70-80% from peak to trough.

Each time, buying OMG/USD when it was around 70-80% below recent highs proved a very profitable strategy, for the shorter-term speculators anyway. Thus, it seems an element of dip-buying is likely supporting OMG/USD at present as well.

It is worth noting that, from a technical perspective, it is very difficult to time the next big push higher after each major drawdown. Most major peaks in OMG/USD seem to be separated by a few months, suggesting the next big bull run may have to wait until 2022.

The fact that OMG/USD’s Moving Average Convergence Divergence indicator (that uses the difference between the 12 and 26-day exponential moving averages) moved into positive territory a few sessions ago is certainly a good sign. Looking back over the past two years, buying when the MACD turned positive and then selling when it turned negative would have been a highly profitable strategy.

MACD turns positive. Source: TradingView

Looking Good on the Log Chart

OMG bulls will take further encouragement from OMG/USD’s long-term logarithmic chart. Since last July, the cryptocurrency has been undulating within an ascending trend channel that has, by and large, been pretty well respected.

OMG’s long-term bullish log chart pattern. Source: TradingView

At the end of November, OMG found support at the bottom of this trend channel. In subsequent weeks, the cryptocurrency has been consolidating, but long-term bullish technicians will hope that the recent confirmation that OMG/USD’s long-term bull-trend remains intact signals a push back towards record highs in the $20.00 area and beyond is on the cards for 2022.

About the Author

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018. Joel specialises in the coverage of FX, equity, bond, commodity and crypto markets from both a fundamental and technical perspective.

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