Optimism’s (OP) Breakout Above $1 Remains Out of Reach as Rally Slows

Key Takeaways

• IOMAP data shows strong selling pressure at $0.93, where 22,000 addresses hold 58 million OP at a loss.
• Holding time for the Optimism token is decreasing, indicating increased sell-offs rather than accumulation.
• OP remains in a descending channel, facing rejection near $1.17, but can bounce under improved conditions.
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OP, the native token of Ethereum-based layer-2 project Optimism, has struggled to gain momentum since failing to reach a new all-time high last December.

Year-to-date (YTD), OP has declined 50.53%, mirroring the broader altcoin market’s downturn. However, the token has recently shown resilience, avoiding a drop to its all-time low.

Despite this strength, several indicators suggest that OP’s recovery may be short-lived.

Optimism’s Recovery To Hit Barrier

At press time, OP traded around $0.90, up 5.73% over the past week. However, on-chain data suggests further gains could be difficult to sustain.

A key indicator signaling potential resistance is the In/Out of Money Around Price (IOMAP), which identifies support and resistance based on token purchase volumes at different price levels.

According to IntoTheBlock, OP’s strongest support sits at $0.88, where over 8,000 addresses hold 43 million tokens in profit. However, resistance looms larger at $0.93, with 22,000 addresses holding more than 58 million OP at a loss.

If OP attempts to break past $0.93, many holders may sell to break even, increasing selling pressure and potentially pushing the price lower.

No Vote of Confidence

Beyond the short-term outlook, OP’s mid-to-long-term potential appears gloomy, as reflected in the Coins Holding Time metric.

This metric tracks how long investors hold an asset before selling. A rising holding time indicates growing confidence, while a decline suggests increased trading activity.

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In OP’s case, the holding time has decreased, indicating frequent transactions. Given the token’s sharp decline this year, this suggests ongoing sell-offs.

If this trend persists, it could further pressure the Optimism crypto price and limit its recovery toward $1.

OP Price Stuck in Bearish Pattern

From a technical perspective, the daily chart shows that OP’s price is trapped in a descending channel. While the token has held the $0.81 support, the setup still looks bearish, based on the position of some indicators.

For instance, the Relative Strength Index (RSI) has increased but has yet to break the neutral line. Amid this, the OP has also not broken above the upper trendline or tested the $1.17 resistance.

If the token fails to break the resistance, it could face rejection in the short term, causing OP’s value to sink to $0.75.

Alternatively, a break above the lower high trendline could change this thesis. If that happens, Optimism could rise to the 0.236 Fibonacci level at $1.23.

In a highly bullish market condition, the cryptocurrency’s value could climb to $2.01 near the 0.618 golden pocket ratio.