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Optimism (OP) Price Approaches Key Decision Area, Potential Major Move Ahead

Published
Nikola Lazic
Published
By Nikola Lazic
Edited by Ryan James

Key Takeaways

  • OP lost 78% of its value by August 2023.
  • An ascending triangle could lead to bullish or bearish outcomes.
  • Breakout direction will determine OP’s next major trend.

Optimism (OP) has shown a significant price increase, beginning with a strong uptrend from $1.15 to $4.80 by March 6.

However, it experienced a steep decline of 38.5%, and by August 5, the price had dropped to $1, losing over 78% of its value.

Currently, OP is approaching a key decision point within an ascending flat triangle, where the direction of the next breakout will define the future trend.

Optimism Price Analysis 

Since October 20, 2023, when the price of OP was $1.15, a significant uptrend emerged, pushing the price to a peak of $4.80 on March 6.

This high marked the end of the uptrend, as the price experienced a 38.5% decline immediately, dipping below $3 on March 20. 

By Aug. 5, Optimism’s price had dropped to $1, losing over 78% of its value. This could have been the competition for its WXY correction, especially as we saw the formation of an ascending flat triangle afterward. 

OP’s price broke above the descending resistance but was kept below $2, its horizontal resistance. Currently, we are seeing another interaction with the ascending support as the price approaches the triangle’s apex.

Breakout direction will provide further insight into the next dominant trend, but as there is an equal probability of a breakout from each side, two scenarios are ahead. 

OP price analysis
OPUSD At ascending flat triangle | Credit: Nikola Lazic/TradingView 

The ascending triangle is the second wave X with one more wave to the downside left in this corrective pattern.

In this bearish scenario, one more lower low for wave Z to develop could bring OP to the $0.80 area. 

Alternatively, the ascending triangle is the first uptrend in the next bull phase, in which a breakout to the upside will lead to a larger recovery. So which is more likely? 

OP Price Prediction

The wave structure inside the ascending triangle cannot conclusively indicate which pattern is developing.

However, there will be some confirmations moving forward. If the price had been made a corrective structure, it should have ended on Sept. 28 at a high of $1.93. 

In that case, following a downtrend to $1.48 on Oct. 3 and the subsequent rise, the first two sub-waves of the next wave, Z, are already being developed.

However, there is also a case to be made that OP is in a leading diagonal, with its Sept. 28 high being wave 3 from the five-wave pattern. 

OP price prediction
OPUSD at a crossroad between scenarios | Credit: Nikola Lazic/TradingView 

 

In the bullish scenario, another higher high after OP bounces from ascending support will confirm the five-wave pattern.

After a correction, the price could be set for a sustained upward advancement. As stated above, it would be best to wait for a breakout and see its direction. 

Disclaimer: The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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