Optimism (OP) Stuck Between Breakout and Breakdown at Key Technical Level

Key Takeaways

• OP may have completed a five-wave macro correction.
• A falling wedge suggests a short-term bullish reversal.
• $0.58 is critical support for the current structure.

Optimism (OP) currently trades around $0.60 after a decline since the April high, nearly wiping out the gains previously made.

While the macro downtrend remains intact, recent price action hints at a possible bottom formation or a final capitulation before reversal.

The charts show a completed five-wave decline and a key decision zone emerging.

OP Price Analysis

On the daily timeframe, OP is in the final stages of what appears to be a large corrective wave (C) within an expanded flat or ABC pattern.

The price peaked around $4.90 in March 2024 and has since trended downward.

Its last downside advancement was in a five-wave impulse structure. It is now approaching the 0.618 Fibonacci retracement level at $0.40.

This retracement also aligns with the horizontal level from mid-2022 and the base of the last major accumulation range – the all-time low.

The daily chart’s Relative Strength Index (RSI) is trending toward oversold territory, suggesting that selling pressure may wane.

The price recently attempted to break through the downtrend resistance but was rejected, recovering from the April 7 low of $0.60

However, this rejection has not yet resulted in a lower low, keeping the potential for a reversal alive.

A confirmed break above $0.85 (0.5 Fib retracement from the peak) would flip the structure bullish and potentially ignite a new uptrend cycle.

If the current support fails, the next levels lie at $0.40 (0.618 retracement) and $0.24 (0.786), but the current structure favors a bottom being near.

The green zone has historically served as a launchpad, making it a highly relevant area to watch for a reversal. Its surpassing will serve as the strongest signal.

OP Price Prediction

On the lower timeframe, OP appears to have completed a clean five-wave impulsive move upward from the $0.54 bottom to a high of $0.85.

This was followed by a descending move, still primarily counted as a well-structured (a)-(b)-(c) corrective pullback.

The (c) wave formed a falling wedge—a bullish reversal pattern—and landed on the $0.58 support level.

Momentum indicators show oversold conditions on the 1-hour RSI, and the wedge pattern breakout attempt is underway.

If OP breaks out above the wedge and forms a higher low above $0.60, the likelihood increases that wave (2) has completed and wave (3) to the upside is beginning.

The bullish scenario targets $0.85 and $1.23, aligning with a major resistance zone and historical order block.

This zone is visually marked in green on the chart and represents the key area to watch for a potential mid-term reversal or consolidation if reached.

Alternatively, if the breakout fails and the OP drops below $0.58, another leg down to $0.40 (the higher-timeframe 0.618 Fib) could unfold as an extended wave (v) of (C).

This would still fit within the macrostructure but delay the breakout scenario and trap premature longs.

The balance favors bulls as long as $0.58 holds and the wedge breakout confirms.

Key Levels to Watch

• Immediate Support: $0.58 (horizontal + wedge bottom).
• Critical Fib Support: $0.40 (0.618 retracement – daily).
• Reversal Confirmation: $0.85 (0.5 Fib + prior structure).
• Target Resistance Zone: $1.10–$1.23 (green order block zone).
• Mid-Term Bullish Target: $1.85 (0.236 retracement from ATH).
• Bearish Continuation Level: $0.24 (0.786 Fib).