ONDO price increased sharply on September 17 as a temporary structure was put in place by the US Securities and Exchange Commission to enable the trading of some tokenized stocks on-chain. This move is directly linked to Ondo Finance’s goal of moving traditional securities on the blockchain.
This was after the announcement by the SEC of its “Innovation Exemption” that provides certain Tokenized Securities Venues (TSVs) with temporary relief, provided some conditions are met. The relief will allow them to trade tokenized National Market System stocks using permissioned automated market makers and liquidity pools.
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According to the SEC, the exemption has been put in place to enable regulated trading on the blockchain of certain tokenized U.S. stocks while the agency works out regulatory requirements for the securities markets in blockchain form.
This relief is only temporary and conditional. This means that the tokenized securities will offer the same rights and privileges to their owners as their corresponding traditional securities. In addition, according to the SEC, there should be the opportunity to challenge the listing of the securities on the eligible venue.
The other exclusion under this framework involves the products that only mirror the cost of a stock without embodying the stock itself.
The importance of the framework for the entire industry of tokenization can be seen from the fact that it lays down a regulatory path for certain blockchain-based securities marketplaces in the US. As per SEC Commissioner Mark Uyeda, the framework has been developed in order to allow regulators to watch the development of these markets.
ONDO Price Faces a Key Technical Test
The regulatory impetus is driving ONDO to a significant technical zone once again.
Crypto analyst Crypto With Gopal pointed out a rectangle pattern on the four-hour chart on September 17. As per the technical assessment, ONDO was trading at $0.353, with a resistance level at $0.425 and a support level of $0.320.
In this pattern, a breakout above $0.425 could result in a test of the chart-indicated target at $0.55. On the other hand, a breakdown below the support level of $0.320 could put the formation under threat.
This implies that the current uptrend hasn’t yet confirmed a complete breakout. ONDO should still be able to rise above the upper edge of the consolidation pattern for the target to become meaningful.
At the time of writing, ONDO is trading at $0.3747, with a 24-hour trading volume of approximately $384.07 million and a market capitalization of around $1.81 billion. The token has gained 13.48% over the last 24 hours.
Momentum Indicators Improve, But Risks Remain
For ONDO, the Bollinger Bands reveal that the price level is currently at $0.36813, above the middle band at $0.35559. The price is still below the upper band at $0.38517 and above the lower one at $0.32600. The position of the price above the middle band suggests that the bulls have more momentum.
MACD has the value of -0.00230. The signal line and the histogram are at -0.00151 and -0.00079, respectively. MACD stays below zero to indicate the presence of bearish pressure on the market.
What Happens Next for ONDO Price?
The first target for the ONDO price might be to keep holding onto the resistance at $0.425, as seen in the four-hour chart setup.
Breaking out of this level would make the setup explained by Crypto With Gopal even stronger technically and put the target of $0.55 in sight. On the other hand, there is the support level at $0.320, which should be watched.
Other than that, the next big thing is what the tokenized securities marketplaces would do in response to the SEC framework. This exemption is just a temporary and conditional one, and the SEC has asked for public input as it contemplates changes in regulation going forward.
This presents a dual challenge for Ondo Finance, as the firm already has its stock tokenization infrastructure in place along with its registrations as a market maker by the U.S. regulators through Oasis Pro Markets and ties to traditional finance infrastructure. Thus, the recent SEC ruling can become a significant event for the broader tokenization industry.
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This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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