Optimism Price Falls to $3 Support — Will OP Hold?
OP price falls to $3 and could face more downside if the level doesn't hold.
Key Takeaways
- Optimism drops to $3, down 27% from last high.
- Majority of OP holders potentially in profit, supporting price.
- Recent transaction uptick could signal growing interest in OP.
Following a market-wide correction, Optimism fell to its $3.00 support level today, April 5. Coming from its last high of $4 on March 26, this was a decrease of 27%. This is part of the significant corrective stage, with some on-chain indicators now suggesting an upturn.
However, looking at the price chart, there are still no signs of a recovery, and the price is trending down. Will it bounce back, or will it continue on its downward trajectory?
Optimism (OP) Fundamentals
Aiming to solidify $3 as a new support, Optimism‘s outlook is further enhanced by the Global In/Out of the Money (GIOM) data . At the current price of $3, slightly over 75% of addresses holding OP are in the money. Meanwhile, just 19.8% are losing out.
This means that most investors bought at a lower price. Looking at the clusters, the previous major one was around $2.50, with 128,000 addresses and a volume of 14 million OP. They are likely to hold their tokens and provide support, but if the OP falls further, they might sell at $2.70, further propelling the price drop as this is the break-even price.
The number of large transactions has experienced a downtrend as it went from a high of 421 txs on March 19 to a low of 62 txs on March 31.
However, as we can see on the chart above, there has been an uptick since the start of April, with a higher point of 172 txs recorded on April 2. The metric was slightly lower yesterday, recording 103 large transactions, but the previous uptick could have signaled a new round of interest in the OP token.
Finally, from a positive spike of 17 million OP in NetFlow on April 2, the number fell to 1.6 million OP yesterday, April 4. Positive NetFlow suggests investors deposit their crypto to exchanges more than they withdraw, indicating a bearish sentiment. As this number decreases, the sentiment could turn bullish.
Optimism (OP) Price Analysis
Since October 20, 2023, when Optimism (OP) was priced at $1.15, a significant uptrend emerged, pushing its value to a peak of $4.80 by March 6. This peak may have marked the trend’s zenith, as a subsequent near 40% decline followed.
Then, OP’s price fell below $3 on March 20, presenting two potential outcomes. The bearish perspective suggests that the uptrend concluded with a five-wave rally, and the recent drop signals the beginning of a more extensive correction phase. This could lead to a lower low than the $2.60 on January 25.
In the optimistic scenario, Optimism is now finishing its fourth wave since its December 28 high of above $4. After its completion, a fifth wave should start. If this happens OP has the potential to reach a new all-time high above $6.
The key to differentiating these forecasts lies in OP‘s behavior during the ongoing correction from March 27. A bearish outcome becomes more plausible if the price retreats to the ascending support level and breaks downward. However, a resurgence above $4 would bolster the case for entering the bullish wave 5 phase.
Disclaimers
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
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