Ocean Protocol extends gains as whales accumulate amid market dip

• Ocean Protocol price increases 6% on Thursday following Wednesday's 22% rally.
• On-chain data suggests that OCEAN’s capitulation event occurred on Wednesday.
• Supply Distribution shows that two cohorts of whales bought the token in the recent price dip.
• A daily candlestick close below $0.475 would invalidate the bullish thesis.

Ocean Protocol's (OCEAN) price extends its rebound and raises more than 6% on Thursday, following Wednesday’s 22% rally after a retest of its weekly support. On-chain data indicates that OCEAN experienced capitulation on Wednesday, prompting significant purchases from large holders during the recent price dip. This suggests a bullish momentum for Ocean Protocol's price as it aims for an upward rally.

OCEAN whales buy the dips

Ocean Protocol price retested its weekly support level at $0.524 on Tuesday and bounced back 22% the next day. Currently, OCEAN is up by 6% on Thursday, trading at the $0.666 level. If the weekly support holds, OCEAN's price could rally 40% to restest its June 5 high at $0.932.

The Relative Strength Index (RSI) on the daily chart is rising from an oversold condition and looking to break above the mean value of 50. The Awesome Oscillator (AO) indicator is below the mean zero level. If bulls are indeed making a comeback, then both momentum indicators must maintain their positions above their respective mean levels. This development would provide additional momentum to the ongoing recovery rally.

OCEAN 1-day chart

On-chain data provider Santiment’s Network Realized Profit/Loss (NPL) indicator computes a daily network-level Return On Investment (ROI) based on the coin’s on-chain transaction volume. Simply put, it is used to measure market pain. Strong spikes in a coin’s NPL indicate that its holders are, on average, selling their bags at a significant profit. On the other hand, strong dips imply that the coin’s holders are, on average, realizing losses, suggesting panic sell-offs and investor capitulation. 

In OCEAN’s case, the NPL indicator had dipped -531,540 and -4.49 million on Monday and Tuesday, respectively, coinciding with an 18% price crash. This negative downtick indicates that the holders are, on average, realizing losses.

During this capitulation event, the OCEAN’s supply on exchanges declined from 406.23 million to 403.5 million in two days. This is a bullish development, which further denotes investor confidence in OCEAN.

OCEAN Network Realized Profit/Loss and Supply on Exchanges chart

Santiment’s Supply Distribution metric shows that whales with 1 million to 10 million OCEAN tokens (yellow line in the chart below) dropped from 479.20 million to 465.45 million in two days. Meanwhile, wallet holdings of 10 million to 100 million (blue line) and 100,000 to 1 million (red line) OCEAN tokens surged from 676.67 million to 690.31 million and 286.64 million to 287.69 million, respectively, in the same period.

This interesting development shows that the first cohort of whales could have fallen prey to the capitulation event. In contrast, the second and third sets of wallets seized the opportunity and accumulated OCEAN at a discount.

OCEAN Supply Distribution chart

However, if OCEAN's daily candlestick closes below $0.475  and establishes a lower low on the daily timeframe, it may signal a shift in market dynamics that favors bearish sentiment. Such a change could nullify the bullish outlook, leading to a 13% crash in the OCEAN’s price to the daily support level of $0.412.

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