Optimism [OP] has emerged as a leading Ethereum-compatible Layer 2 scaling solution following the public launch of its mainnet in December 2021. Currently, it holds the fourth position on DeFiLlama’s dashboard, with a total of $688 million locked in its smart contracts as of now.
Despite its strong performance as a Layer 2 solution, the native governance token of Optimism has not shown significant growth in the market. The price of OP has remained relatively stagnant over the past four months.
When examining the daily timeframe, it is evident that the short-term Simple Moving Averages (SMA) and Exponential Moving Averages (EMA) have consistently remained below their 200-day Moving Averages, indicating a prolonged bearish trend.
Despite the subdued price movement, there has been a notable increase in on-chain activity in recent days. According to IntoTheBlock, the number of large transactions on Optimism surged to a nearly five-month high on October 15.
This surge in high-value transactions suggests that large holders may be strategizing ahead of future events, potentially anticipating shifts in the market dynamics of OP.
Recent Airdrop and Token Unlock for Optimism
In the previous week, Optimism successfully completed its fifth airdrop, distributing 10.3 million OP tokens to around 54,700 addresses. The project started with a total supply of 4.294 billion OP tokens and faced initial challenges with its mainnet during the first airdrop due to overwhelming demand.
During the first airdrop in June 2022, the Optimism Foundation distributed 200.1 million OP tokens to 248,699 addresses. Subsequently, the second airdrop attracted more participants, with over 308,000 eligible addresses collectively receiving 11.7 million OP tokens.
According to the Tokenomist token unlocks monitoring tool, Optimism is gearing up for a significant token unlock set for October 31st. Approximately 31.34 million tokens, equivalent to 2.5% of OP’s circulating supply, will be released to investors and core contributors.
Potential Breakout from the Downtrend for OP
Optimism was trading at $1.72, positioned above an upward trending lower support line at the time of this analysis. This setup presents an opportunity for bullish OP traders to challenge the resistance zone between $1.93 and $1.98, corresponding with the 200-day EMA and SMA, respectively.
In order to confirm a breakout from the current range, OP/USDT must effectively surpass the psychological barrier at $2.00 and successfully turn it into a support level.
Interestingly, the price of OP has demonstrated the strongest correlation over the past 30 and 60 days with Avalanche (AVAX). This correlation with AVAX has been relatively stable compared to the fluctuating correlation with Bitcoin (BTC).
Both Optimism and Avalanche represent Ethereum-compatible blockchain platforms aimed at addressing scalability issues, although their foundational designs differ.
Optimism utilizes Optimistic rollups, consolidating transaction data into a single transaction on the Ethereum mainnet. Meanwhile, Avalanche operates as a standalone L1 blockchain with its unique consensus mechanism.