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Optimism Hits a New High Record — Will OP Keep on Rising As TVL Approaches $1 Billion?

Last Updated December 28, 2023 1:03 PM
Nikola Lazic
Last Updated December 28, 2023 1:03 PM

Key Takeaways

  • Oprimism reached a new all-time high of $4.20.
  • On-chain data show an increase in activity.
  • Chart analysis points out a short-term consolidation before a further upside.

Optimism ‘s native token, OP, has been making significant strides, capturing the attention of investors. After experiencing a downturn to $1 in June 2023, following its peak at $3.20 in February, OP has recently surged, reaching a new high of $4.20 on December 27. This remarkable recovery, surpassing its previous February high, marks a pivotal moment in the token’s trajectory.

Nearing $1 billion
Optimism TVL

Particularly noteworthy is the concurrent rise in Optimism’s Total Value Locked (TVL), which has been steadily increasing since October. Currently, the TVL stands at an impressive $922.41 million, indicating strong underlying demand and fundamental support for the token. This rise in TVL, although not the highest point of the year or an all-time high, suggests a robust and growing interest in the Optimism ecosystem.

As we explore the potential of OP in the context of its rising TVL, the question arises: Will OP continue its upward trend as its TVL approaches the $1 billion milestone? 

Optimism On-chain data

We can see a bullish picture by examining the adoption of Optimism by looking at the on-chain transaction data. The number of active addresses has been increasing with the rising price. It went from a low of 10k on December 21 to a  high of 31,4k on December 22, tripling in only one day. It has fallen since but is overall in a 122% increase at its 7-day average. 

Active addresses
Spike in price

The next metric that shows increasing adoption is the number of transactions. It, too, took a bullish upturn from October when it was sitting around 10k tx at its lowest point, rising to a peak of nearly 64k txt on December 22. 

OP number of transactions
Transactions increased

It decreased to 40k txs in the next couple of days, but another upturn was seen, with the metric now being at 57,000 txs and still going upward. 

OP Price Analysis  

The price of OP has been on a rocky road since its market release. Significant downturns have followed large rises, but what’s interesting is that the structure has maintained higher highs and lows. 

Five-wave impulse
In a wave 3

Its uptrend started on October 19, after a low of $1.15, dipping slightly below the ascending support. As this was an impulsive move, we can expect it to develop in a five-wave manner. Yesterday’s high of $4.20 appears to be wave 3, which could have ended judging by the wave structure. 

If this is true, we could see a minor retracement for wave 4, but another high would could happen for wave 5. Considering that the price respected the boundaries of the ascending channel, our target for the end of this uptrend would be a final interaction with its resistance level. 

This is below $6 but depends on when it comes upward; the more time it needs, the higher the resistance will be. 

In conclusion, as we approach 2024, the price would be expected to consolidate after reaching a new all-time high, but continue increasing at the start of January and continue its bullish trajectory until February 2024. 

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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