From Arbitrum to Optimism, a variety of scaling solutions have been launched in the past few months and there is still no perfect hold. Several networks have been and are able to take advantage of market launches, with OMG being the most recent.
OMG is an unattended Layer 2 scaling platform that uses optimistic rollups to improve Ethereum’s scalability. It recently teamed up with Enya, the owner of Boba Network. As a Layer 2 solution itself, Boba intends to lower gas charges, improve transaction throughput and expand smart contract capabilities.
In fact, the number of locks on the OMG network has increased by 209.78% in the last 7 days, the highest of any known Layer 2 solution. In particular, Enya built the Boba Network as a key contributor to the OMG Foundation and that is the main reason the OMG token can benefit from Boba’s brisk activity.
Like all coins, OMG rallied strongly in the April to May period but fell victim to the crash in mid-May. After low volatility in the June to July period, OMG had resumed its larger uptrend and has rebounded more than 390% since then. However, the growth has become even clearer this week.
OMG price table | Source: TradingView
What makes OMG rise continuously?
The consistency maintained on the chart makes OMG price a pretty attractive option, doesn’t it? Well, unfortunately, there is one weakness that market participants need to be aware of. The status of the indicators changed late and the overall trend is not bullish.
For example, consider the price-DAA divergence. This model tracks the relationship between the price of the coin and the number of daily addresses that interact with the coin. A buy signal is given when the DAA rises with the price. Conversely, pressure to sell arises when active addresses decline during a bull phase.
However, in recent weeks, declining forecasts have been noted on the charts, indicating an unhealthy state of active addresses.
OMG. DAA price variance | Source: Santiment
The supply on the stock exchanges has also increased lately, which indicates a lack of buying momentum. Only when this metric goes down does it mean that OMG is being transferred from exchanges to private wallets. Therefore, if buyers continue to show little interest, the rally will not last long.
OMG offering on exchanges | Source: Santiment
The inactive circulating supply has continued to decline. For example, this has dropped from 5.21 million to 109,000 in the past 3 weeks, showing the movement of older OMGs. Basically, whenever a coin is inactive it means that there is an accumulation trend taking place. However, the current trend suggests that confident investors are selling heavily.
Therefore, taking into account the state of the above indicators, it can be confirmed that OMG is likely to see a decline in the coming days. However, if the pressure to buy increases, the status of most indicators improves. Indeed, the broader environment could then fuel a long double rebound for OMG.
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According to AMBCrypto