Optimism (OP) Breaks Resistance Zone With 36% Spike in a Single Day
OP price makes a breakout above significant horizontal resistance signaling the beginning of a new bullish phase.
Key Takeaways
- OP surpassed $2.00, confirming bullish momentum.
- $1.20 acted as a strong support during consolidation.
- Room for continued upside with RSI below overbought levels.
Optimism (OP) has broken out of its prolonged bearish trend after reaching a yearly low of $1 in August.
The Nov. 20 breakout above the $1.90-$2.10 resistance zone signals a potential bullish phase, supported by rising momentum and the ascending triangle pattern validation.
OP Price Analysis
After reaching its yearly high of nearly $5 in March, the price of OP entered a prolonged bearish phase, returning to $1 in August.
The daily chart shows a significant breakout from the $1.90-$2.10 resistance zone that occurred on Nov. 20, which aligns with the end of a multi-month corrective phase.
This 36% move suggests that OP could now enter an impulsive wave to retest prior highs.
The ascending triangle formed on Aug. 5 and over recent months has validated its bullish potential, and the breakout is supported by increased buying pressure.
If OP sustains above $2.00, it could aim for $2.50 or higher in the next leg of its upward trend. Conversely, retesting the $2.00 breakout level for support would confirm the uptrend’s strength.
Key Observations
- Breakout Above Resistance: Optimism (OP) broke above the $2.00 resistance zone, marking a potential trend reversal after consolidating within a WXY corrective structure. This breakout is a strong signal of renewed bullish momentum.
- Accumulation Phase Base: The $1.20 support level was a strong accumulation zone during the prolonged consolidation phase. This zone provided the foundation for the recent rally.
- Bullish RSI Momentum: The Relative Strength Index (RSI) is trending upward but remains below overbought levels, suggesting room for continued upside before a potential correction.
OP Price Prediction
The hourly chart indicates that OP has successfully broken out of its consolidation phase, confirming a higher-degree wave 3 in its impulsive structure.
Following the recent corrective wave 2 bottoms at $1.30 on Nov. 4, the price surged to $2.10, breaching the critical resistance.
This rally aligns with strong momentum, as reflected in the RSI, which remains elevated but not overbought. This indicates room for further upside as wave 3 of a lower degree continues.
The breakout confirms bullish sentiment, with the price moving toward the projected Fibonacci targets. The 1.272 Fibonacci extension at $2.45 and the 1.618 level at $2.76 are likely short-term targets, with wave (v) potentially extending beyond $3.00.
However, the price may retrace to retest the $2.00 zone before continuing higher.
Key Levels to Watch
Support Levels:
- $2.00: Key breakout level, acting as strong support during a retest.
- $1.86: 0.618 Fibonacci retracement, critical for maintaining bullish momentum.
- $1.30: Recent low and wave (ii) support.
Resistance Levels:
- $2.45: 1.272 Fibonacci extension, the first target for wave (iii).
- $2.76: 1.618 Fibonacci extension, strong mid-term resistance.
- $3.10: Wave (v) projection, aligned with the 2.0 Fibonacci extension.
- $3.65: 2.618 Fibonacci extension, the potential peak for the current impulsive wave.
The continuation of the uptrend depends on holding above $2.00.
A retest and successful bounce from this level would confirm the next leg higher, while a breakdown below $1.86 may signal the start of wave (iv) correction.
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