OMG Primed for Big Bullish Push Towards $20.00 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.
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.
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.
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.