ONDO Forms Falling Wedge Pattern Ahead of Major Token Unlock Event

Crypto project Ondo Finance, which is backed by Coinbase and Pantera, has formed a falling wedge pattern ahead of a major token unlock event. The token crashed to a low of $1.2250, down more than 43% from its highest level in December.

Ondo will be among the cryptocurrencies to watch this week as the network unlocks 2.57 billion tokens, which is 25.7% of the total supply. These tokens will be valued at $2.3 billion, which is substantially higher than its current market cap of $1.7 billion.

Ondo currently has 1.38 billion tokens in circulation out of a total supply of 10 billion. As per data from CoinMarketCap, it will have 2.57 billion tokens unlocks in January 18, 2026, and 2027, and the last one of 1.04 billion in 2028. This approach differs from other crypto projects with regular monthly unlocks.

These token unlocks will be allocated to private sales, ecosystem growth, and protocol development.

In theory, a token unlock is usually negative for a cryptocurrency because it dilutes existing holders. This is similar to when companies issue new shares, diluting existing investors and reducing their earnings per share. However, at times, cryptocurrencies rise ahead of a major unlock because they have been priced in by market participants.

Ondo price will also react to the upcoming US consumer inflation data, which will provide more information about the US economy. A sign that inflation remained red hot in December will hike odds that the Fed will maintain a hawkish tone in the next meeting.

This expectation explains why US bond yields have surged recently, with the 30-year moving to a multi-year high of 5%. Higher yields may make the US Dollar Yield (USDY) and US Treasuries (OUSG) tokens more attractive to investors. USDY, which yields 4.35%, has $451 million in assets, while US Treasuries (OUSG) has $170 million.

The daily chart shows that the Ondo token price has pulled back in the past few weeks. It has dropped from $2.1360, its highest level in December to a low of $1.2. It crashed below the support at $1.4792, its highest swing in June last year.

Most importantly, the Ondo Finance coin has formed a falling wedge pattern comprising two falling and converging trendlines. Since the two lines are nearing convergence, a bullish breakout may occur. If this happens, the next point to watch will be $1.4792, the upper side of the cup and handle pattern.