Ondo Finance extended its downward trajectory on Wednesday, breaching the critical $0.4000 support threshold and intensifying pressure on a market that had already exhibited waning momentum following a robust rally earlier in the month. This correction marked the second consecutive day of losses after the token failed to maintain gains near the May peak of $0.4877. The preceding rally had gained significant traction during the opening week of May, driven by a surge in retail trader activity across the derivatives sector. Data compiled by Woofun AI shows that Futures Open Interest climbed to nearly $245 million during this period, representing the highest level recorded since October and signaling aggressive speculative demand. Beyond retail participation, the asset attracted institutional attention after completing a pilot program involving tokenized short-term United States Treasuries, a move facilitated by collaborations with JPMorgan, Mastercard, and Ripple that fueled renewed optimism around tokenized finance products.

However, the recent price action reflects a sharp contraction in leverage, with Open Interest dropping from nearly $229 million to approximately $201 million by Wednesday. This decline indicates a weaker appetite among traders who previously underpinned the rally through leveraged positions on futures exchanges. Despite the reduction in exposure, the broader derivatives market retained signs of cautious optimism. Ondo's weighted funding rate remained positive near 0.0049 percent, demonstrating that traders holding long positions continued to pay premiums to maintain their bullish bets. At the time of analysis, ONDO traded near $0.3904, successfully remaining above both the 50-day and 100-day Exponential Moving Averages, which are clustered around the $0.3100 region.

Technical indicators further suggest that the broader upward structure remains preserved. The token continued to hold above the SuperTrend support level near $0.3348, a key metric for maintaining trend integrity.

Concurrently, the Moving Average Convergence Divergence indicator stayed in positive territory on the daily timeframe. Significantly, the Relative Strength Index hovered in the mid-60s range, suggesting that buyers still controlled momentum even as the market approached stretched conditions. Woofun AI notes that analysts are closely watching the 200-day Exponential Moving Average near $0.4017, which now serves as immediate resistance for the token. A decisive daily close above this level could strengthen buying momentum and support another attempt toward recent highs.

On the downside, traders continue to monitor support zones around the SuperTrend level near $0.3348 alongside the 100-day and 50-day moving averages. These regions may attract renewed buying demand if the current pullback persists during the remaining trading sessions.

Furthermore, market participants remain focused on whether developments surrounding treasury products can restore confidence and stabilize futures activity. Trading volume has remained steady during the correction, indicating that investors continue to react actively to price swings rather than exiting the market entirely. Woofun AI analysis suggests that while speculative fervor has cooled, the underlying technical foundation and institutional partnerships provide a buffer against a deeper correction, pending further catalysts in the tokenized real-world assets sector.